The International Energy Agency in a report on Tuesday said investments in USA shale projects are expected to rise 53% in 2017, attracting money as the producers have been able to break even at lower prices because of efficiency gains and cost improvements.
OPEC oil output has risen in June by more than 300,000 barrels per day, (bpd) according to figures the exporter group uses to monitor its supply, as a recovery in two nations exempt from a supply cut deal countered high compliance by many others.
Brent crude, an worldwide benchmark, has dropped 15 per cent this year and was trading on Wednesday at US$48.13 a barrel.
The group has estimated that by 2020, United States crude exports will rise to 2.25 million barrels a day. Tuesday's revised short-term energy outlook report from the EIA showed a lower production forecast for 2018 to 9.9 million barrels a day, slightly down from around 10 million before.
OPEC produces a heavier and sourer form of oil while US, Nigeria and Libya's are light and sweet. "I feel lower crude oil prices is a good reason to own stocks". Even though USA oil production may break a record in a few years, the fact that the EIA is counting on the U.S.to account for 90% of the globe's production growth in the coming years, this reduction in production should be worrisome. U.S. West Texas Intermediate crude CLc1 rose $1.31, or 2.9 percent, to settle at $45.71 per barrel.
Prices "are likely to remain at the lower end of the recent trading range until U.S. oil investment and production decline", said Rob Haworth, senior investment strategist, at U.S. Bancorp Wealth Management.
"There is no (supply) cut" even for heavier grades such as Arab Medium and Heavy crude, one of the sources said.
So, barring big supply shocks or an unexpected economic boom, anybody who lives or dies by the price of oil might want to settle in for a long slog.
With US driving season often the root cause of significant summer drawdowns in US crude inventories, this is not necessarily unexpected.
The producer group's total output jumped by about 393,500 barrels a day to a total of 32.6 million barrels a day last month, according to independent assessments cited by OPEC in a monthly report, CNBC reported.
LONDON, July 11 (Reuters) - Oil prices fell on Tuesday as global oversupply encouraged several banks to cut their forecasts for crude for this year and 2018. USA refineries produced about 10.5 million barrels of gasoline a day last week, up by about 100,000 barrels a day compared to the prior week.
"There is substantial agreement that USA fracking activity has moved too far and too fast, growing US production at an uneconomic pace", wrote Bauer School of Business economist Bill Gilmer last month.
The monitoring committee for the production cut deal is made up of Algeria, Kuwait, Venezuela, and two non-Opec countries - Russian Federation and Oman.