EIA: US Production Growth Among Risks to Oil Market Rebalancing

EIA: US Production Growth Among Risks to Oil Market Rebalancing
Offshore Gulf of Mexico production largely drives US crude oil production growth in 2017 and 2018, according to US Energy Information Administration's outlook.

U.S. crude oil production will grow modestly this year and in 2018, keeping prices for the commodity in the low $50s per barrel, according to research from the U.S. Energy Information Administration.

The agency released its first Short-Term Energy Outlook for the year on Tuesday and highlighted that Brent pricing would average $1 per barrel more than West Texas Intermediate (WTI) prices for both 2017 and 2018. That renders the WTI average at $52 per barrel in 2017, followed by $55 per barrel in 2018.

OPEC production cuts announced in November kept December oil prices above $50 per barrel for the first time since mid-2015, and confidence in the compliance with those cuts will likely support the higher prices, EIA said.

However, countries not subject to the terms – such as the United States – may increase production, which could delay consistent global inventory withdrawals until the second half of 2018.

“Uncertainty in the production response from Libya, Nigeria, and the United States in the coming months presents some of the largest risks to the timeline of oil market rebalancing,” EIA said in the report.

During a presentation at Columbia University in December, OPEC Secretary General Mohammad Sanusi Barkindo seemed to suggest the United States and other producing nations should also pledge to limit oil production to achieve price stability.

“The experience of 2016 has shown us that the importance of cooperation and dialogue between all oil industry stakeholders has never been greater. We believe that our future will increasingly be one of energy interdependence. We do not live in a world of independent energy nations,” he said. “In the context of this vision, OPEC sees benefits in exploring and initiating an energy dialogue with the U.S. We believe this engagement is vitally important to all.”

An award-winning journalist, Deon has reported on energy, business and politics for almost 20 years. Email Deon at deon.daugherty@rigzone.com

WHAT DO YOU THINK?

Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Related Companies
Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE

More from this Author
Deon Daugherty
Senior Editor | Rigzone
 -  Op-Ed: Crude Export Habits Could Facto... (May 26)
 -  BLOG: OFS Crew Cuts May Shave Near Ter... (May 25)
 -  Come Together: All Eyes On OPEC's Epic... (May 24)
 -  Politics Won't Slow Mexico As It Barre... (May 24)
 -  Op-Ed: With Saudi Aramco IPO Looming, ... (May 18)


Most Popular Articles

From the Career Center
Jobs that may interest you
Dispatcher Level 1 and Level 2
Expertise: Logistics Management
Location: Denton
 
Senior Land Professional Job
Expertise: Landman|Lease Analyst
Location: Oklahoma City, OK
 
Surface Land Professional Job
Expertise: Landman|Lease Analyst
Location: San Antonio, TX
 
search for more jobs

Brent Crude Oil : $51.46/BBL 4.63%
Light Crude Oil : $48.9/BBL 4.78%
Natural Gas : $3.18/MMBtu 0.90%
Updated in last 24 hours