US set to overtake Saudi Arabia, Russia in oil production in 2018

By Musa Adamu with agency report

American shale oil companies are expected to make a surprise comeback in 2018 as prices stabilise, which could see the US become the world’s leading energy giant surpassing major producers in the Gulf region, a CNBC report has indicated.
The Medium quoted a report from the International Energy Agency (IEA) predicting that the US would overtake Saudi Arabia and Russia over the next 12 months to become the world’s biggest producer of oil.
According to the report published last Friday, IEA said 2018 promises to be a record setting one for the US.
It said: “Relentless growth should see the US hit historic highs above 10 million barrels a day in production, overtaking Saudi Arabia and rivaling Russia during the course of 2018, provided OPEC and non-OPEC restraints remain in place.
The report said US shale companies had been buoyed by a recent rise in oil prices, which had seen the cost of the barrel to rise from lows of the mid $20s in 2016 to $70.
It said production cuts by OPEC members and non-OPEC states helped prices stabilise over the past two years with further restrictions planned to eat into a backlog of supplies.
It quoted an energy analysts, as hoping this would see prices rise further in 2018 even as the low costs had also been a boost for US crude oil producers.
“These were blamed for the initial oversupplyand many of the smaller producers were predicted to go bust in the age of cheap oil. Some did fold or put production on hold but recent highs mean that shale companies are going back online.”
It said the IEA predicts a “wave of new production” from the US, which could unsettle the market and be a big hit for oil-producing states such as Saudi Arabia who might have believed they were on the road to recovery.
CNBC further quoted head of the oil industry and markets division at the IEA, Neil Atkinson, as explaining that: “What we are trying to understand is the responsiveness of the US shale producers. And because of the dynamism of the industry, the innovation and the vast number of players in that space… to some extent, we are in unchartered waters,”
It said US crude oil production was at its highest in 50 years with companies pumping out nearly 10 million barrels a day.
“The IEA predicts output to rise to 10.4 million in 2018, while Saudi Arabia produces just under 10 million a year.”