Oil prices hits at $65 as U.S. shale output growth gathers pace
London (Reuters): Oil prices edged lower toward $64 per barrel on Monday on predictions of a major spike in U.S. oil output in the next five years.
International benchmark Brent crude was down 21 cents, having shelved morning gains of around 0.6 percent, at $64.16 a barrel by 1319 GMT. The contract was well below this year’s highs of over $71 per barrel that it hit in January.
The International Energy Agency on Monday revised U.S. oiloutput growth up sharply, saying the country would be producinga total of nearly 17 million barrels per day in 2023, up from13.2 million last year, eating into OPEC’s market share andmoving closer to self-sufficiency.
U.S. West Texas Intermediate (WTI) crude CLc1 rose 42cents, or 0.7 percent, to $61.67 per barrel.
The IEA, which advises industrialized nations on energy policies, also said it expected oil demand growth to average a fairly robust 1.1 percent a year to 2023 and said OPEC would fail to significantly increase its production capacity.
“Oil production growth from the United States, Brazil, Canada and Norway can keep the world well supplied” the IEA said in its mid-term market report.
“One thing hasn’t changed over the past year, however. Upstream investment shows little sign of recovering from its plunge in 2015-2016, which raises concerns about whether adequate supply will be available to offset natural field declines and meet robust demand growth after 2020,” it added.
Suhail Mohamed Al Mazrouel, the United Arab Emirates oilminister and OPEC’s current president, said on Sunday that theoil cartel has not discussed rolling over production cuts nextyear.
U.S. crude oil production has already risen past that of topexporter Saudi Arabia, to 10.28 million barrels per day (bpd).
The number of oil rigs drilling for new production in theUnited States RIG/U rose to 800 for the first time since April2015 in early March, pointing to more increases in output tocome.