Drill Baby Drill
During his campaign, Donald Trump was wildly cheered by proponents of the coal industry. The coal industry has not seen a significant increase in production or employment levels in the year since Trump has taken office. The same cannot be said for the oil industry. The US is increasing oil output and is expected to surpass the current leading oil producer in the world (Saudi Arabia).
LONDON—Surging U.S. crude oil production this year is expected to surpass output in Saudi Arabia and rival that of Russia, the world’s two largest oil producers, the International Energy Agency said Friday.
Boosted by a resurgent shale industry, U.S. crude production will likely climb above 10 million barrels a day in 2018, an all-time high not seen since 1970, the agency said in its closely watched monthly oil market report. The IEA raised its outlook for U.S. crude supply this year by 260,000 barrels a day, to a record 10.4 million barrels a day, largely a result of the recent rally in crude prices.
“The stage was set for a strong expansion last year when non-OPEC supply, led by the U.S…pushed up world production,” offsetting output cuts by the Organization of the Petroleum Exporting Countries and other producers, the agency wrote.
OPEC and 10 producers outside the cartel, including Russia—which produced around 10.9 million barrels a day in 2017—agreed late last year to extend an agreement to hold back crude output by nearly 2% through the end of 2018. The accord was first struck at the end of 2016 with the aim of reining in a global supply glut that has weighed on prices for over three years.
OPEC’s 14 members averaged a compliance rate of 95% with the cuts throughout last year, according to the IEA, falling to 39.2 million barrels a day from a high of 39.6 million barrels a day.
