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Venezuela 'political prisoners' held hostage in jail riot – BBC News

BBC News

IEA Sees Explosive Growth in U.S. Oil Output as Prices Rally

OPEC’s fear that another upsurge of shale petroleum could neutralize its production cuts might be coming true.

U.S. oil output is situated for” explosive” growth this year as costs rally, the International Energy Agency said on Friday. That was just one of a chorus of voices from Goldman Sachs group Inc. to OPEC itself warning of a looming output surge reminiscent of the” heady days” of the first shale boom.

As the Organization of Petroleum Exporting Countries and allies including Russia gather in Oman this weekend, achievements including a three-year high in oil prices and rapidly dwindling supply glut may be overshadowed by the risk of becoming victims of their own success.

Heady Days

Non-OPEC oil output growth in 2018 is comparable with the best years of U.S. shale boom

Source: International Energy Agency

” The big 2018 supplying narrative is unfolding fast in the Americas” the IEA said in its monthly report.” Explosive growth in the U.S. and substantial gains in Canada and Brazil will far outweigh potentially steep deteriorations in Venezuela and Mexico .”

Even with the moderate price response to the OPEC-led cuts during most of 2017, rival suppliers still managed to bounce back with output growth of 700, 000 barrels a day, the IEA said. As producers react to the recent surge in Brent crude above $70 a barrel, the agency expects non-OPEC render to expand by 1.7 million this year, the biggest jumping since the peak of the shale boom.

See also: Conoco CEO Fears’ Overcorrection’ as Oil Rally Tempts Drillers

That would deliver an unsatisfying outcome for OPEC and its allies in 2018. Rival suppliers would be handed the entire 1.3 million barrel-a-day expansion in the global petroleum market this year, and U.S. crude output could overtake that of Saudi Arabia and even get close to Russia, IEA data present. To induce matters worse, another year of production cuts would have little consequence on petroleum inventories — which relevant agencies says are still 90 million barrels above OPEC’s target.

Venezuelan Suffering

While the U.S. gains, there are others that are still suffering. The IEA expects Venezuela’s troubles to worsen after its 2017 production fell to the lowest in virtually 30 years.

” Given Venezuela’s astounding debt and deteriorating oil network, it is possible that declines this year will be even steeper than the 270,000 barrels per day in 2017 ,” the report said. Yet, the IEA doesn’t see a” clear sign yet of OPEC turning up the taps to cool down oil’s rally” or” compensate for a precipitous drop in supplying from Venezuela .”

OPEC and its partners will gratify in Oman over the next two days to review their strategy for clearing the global petroleum glut. Pastors from the United Arab Emirates, Iraq and Kuwait have said the deal needs to continue. Russia’s Energy Minister Alexander Novak said talks this weekend could include mechanisms for gradually exiting the supplying cuts after the agreement concludes at the end of 2018, while also reaffirming its commitment to the agreement.

For now, OPEC’s own analysis of the oil market isn’t flashing any warning signs. The group predicts stronger growth in demand and a weaker recovery in rival supplyings than the IEA, connoting a steady drop in inventories through the year.

” We assure the IEA’s assessment as most realistic than OPEC’s ,” analysts at Commerzbank AG said in a note.” OPEC’s assumption of non-OPEC supply is far too low .”

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