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Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

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Established in 2006 as a Community of Reality

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    US oil production growth blurs OPEC cuts in 2019

    Rocky
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    • Post n°1

    US oil production growth blurs OPEC cuts in 2019 Empty US oil production growth blurs OPEC cuts in 2019

    Post by Rocky Thu 27 Dec 2018, 2:27 am

    US oil production growth blurs OPEC cuts in 2019

    US oil production growth blurs OPEC cuts in 2019 12006
    Oil 


    Expectations show that the increase in US crude production will obscure OPEC production cuts aimed at rebalancing the market by the end of next year, undermining the organization's efforts as rock oil producers increase output regardless of the price environment.
    The US Energy Information Administration said yesterday that US oil production was 11.6 million bpd in the latest week, just below the all-time high of 11.7 million bpd. If production increases at the rate projected by the Department of Information, it will actually swallow OPEC cuts by the end of 2019.
    Earlier in December, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, agreed to implement sweeping production cuts of 1.2 million barrels per day (bpd), with non-OPEC allies contributing to a reduction of 400,000 bpd.
    The Energy Information Administration said last week that this was equivalent to an expected increase in US production next year by 1.18 million barrels per day due to the growth of shale oil in early 2019 and the launch of long-awaited sea projects later in the year.
    Concerns over the price caps of crude oil in the last two months have hurt US crude prices to $ 46 a barrel on Tuesday, from a peak above $ 76 a barrel in October.
    US production rose last year, surpassing the record 10 million barrels per day in 1970.
    With technologies such as hydraulic cracking advancing, the United States has become the world's largest producer of crude and is expected to exceed 12 million bpd in the coming months.
    "In light of the impending pipeline of supplies, OPEC cuts do not seem to be enough to prevent a significant growth in inventories next year," said Robert McNally, president of Rapidan Energy Consulting in Washington.
    This highlights the growing difficulties faced by OPEC in curbing supply to raise prices to a level that the Organization considers acceptable and appropriate to the budgets of countries. Saudi Arabia's budget for 2019 is expected to be the largest ever, but economists say the kingdom's budget is based on an average price of $ 70 for Brent crude in 2019. Crude currently stands at $ 58 a barrel.
    OPEC data released this month shows OPEC is losing a market share in 2019, with its share of crude falling from about 33 percent this year to 31 percent in 2019.
    "I think these (production cuts) are not a single and final solution," said Daniel Yergen, vice president of IHS Market. "It will be a continuous process for a global market that adapts to continued production growth in the US The global oil market has clearly entered the age of rock oil."
    OPEC and its allies cut production by 1.6 million barrels per day by the end of 2016 in a bid to reduce the global supply gap, but over the lifetime of that agreement, the US market increased 1.62 million barrels a day, giving OPEC a market share.
    This could happen faster this time, one of the reasons why Opec and others have expected cuts to last for only six months. Saudi Energy Minister Khalid al-Falih said on Wednesday he expected global oil inventories to fall by the end of the first quarter of the year.
    Source: Reuters

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