Fast-rising US shale output continues to hamper efforts by the Organisation of the Petroleum Exporting Countries (Opec) to cut oil supply to boost prices.
IHS Markit senior director Bhushan Bahree noted in a statement on Friday that the US’s crude oil production is expected to rise by more 900 000 bbl/d this year.
This will offset the cuts by Opec members, who, this week, agreed to extend their supply restraint agreements for another nine months to the end of March 2018.
During Opec’s meeting in Vienna, Austria, on Thursday, Saudi Arabia Energy Minister and current Opec President Khalid Al-Falih said the decision was the “optimal choice” following deliberations aimed at rebalancing the market and bringing inventory levels down to five-year average levels.
“He wants to bring inventories down to their five-year average. This has proven an elusive goal so far. But the drawdown has now begun and will accelerate,” said Bahree.
Opec members want oil prices to remain above $50/bl.