1. US to overtake Saudi Arabia as crude oil producer, says International Energy Agency

US to overtake Saudi Arabia as crude oil producer, says International Energy Agency

The United States are set to overtake Saudi Arabia as the world's number two oil producer this year, as shale companies, attracted by rising prices, ramp up drilling, the International Energy Agency said today.

By: | Paris | Published: January 19, 2018 4:06 PM
saudi arabia, saudi arabia oil, saudi crude oil, saudi arabia oil production, oil industry, us oil industry, american oil companies, global trade, us oil industry to break recordglobal energy dominance Rising prices have, in turn, made it more attractive for shale companies to increase drilling. (Reuters)

The United States are set to overtake Saudi Arabia as the world’s number two oil producer this year, as shale companies, attracted by rising prices, ramp up drilling, the International Energy Agency said today. “This year promises to be a record-setting one for the US,” the IEA wrote in its monthly market report. Crude production of 9.9 million barrels per day (bpd) in the US was now at the highest level in nearly 50 years, “putting it neck-and-neck with Saudi Arabia, the world’s second largest crude producer after Russia,” the IEA said. “Relentless growth should see the US hit historic highs above 10 million bpd, overtaking Saudi Arabia and rivalling Russia during the course of 2018 — provided OPEC/non-OPEC restraints remain in place,” it said. A global supply glut pushed oil prices as low as $30 per barrel at the start of 2016. But producing nations — both inside and outside the OPEC oil cartel — struck a deal at the end of 2016 to cut back production and drive prices higher. Geopolitical tensions and a reduction in oil stocks have also contributed to the recovery. Crude recently rose above $70 per barrel for the first time since 2014 after OPEC and non-OPEC countries agreed to extend their combined cutbacks until the end of this year.

Rising prices have, in turn, made it more attractive for shale companies to increase drilling. And since the United States is not a party to the deal, its shale production can continue uninhibited. “US growth in 2017 beat all expectations … as the shale industry bounced back, profiting from cost cuts, (and) stepped up drilling activity,” the IEA said. “Explosive growth in the US and substantial gains in Canada and Brazil will far outweigh potentially steep declines in Venezuela and Mexico,” it said. “The big 2018 supply story is unfolding fast in the Americas,” the IEA said. Shale production is controversial, because in order to extract oil and gas, a high-pressure mixture of water, sand and chemicals is blasted deep underground to release hydrocarbons trapped between layers of rock.

And environmentalists argue that the process — known as fracking, or hydraulic fracturing technology — may contaminate ground water and even cause small earthquakes. Turning to OPEC output, the IEA said that there was “no clear sign yet of OPEC turning up the taps to cool down oil’s rally”. In its own montly market report published yesterday, the Organization of Petroleum Exporting Countries had said that the global oil market was moving closer to reaching a healthy balance between supply and demand.

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  1. Kushal Kumar
    Jan 22, 2018 at 6:21 pm
    News reports in January 2018 say that diesel- petrol prices are record high in Delhi , which can be read in between the lines of this Vedic astrology writer’s alerts for more care and appropriate strategy during 2018 , more so around mid-March to 31 May 2018, in article - “ Astrologically speaking , some highlights for India in coming year 2018” - published at theindiapost on 19 October , 2017. Just reproducing the related text from the article here : - “ Mid-March to 31 May 2018. …………..And such like commodities as scent or cosmetics could be in focus”. So here reading between the lines , while ‘scent’ and ‘cosmetics’ give out good smell , diesel-petrol commodities emit ‘ repulsive or repugnant smell’. Therefore , in prediction diesel-petrol could have been read as implied .
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