Gains in US supply are undermining efforts by the Organisation of Petroleum Exporting Countries and its allies (OPEC+), whose production cuts are in their third year in a bid to drain stockpiles.
Sunday 15, September 2019
The US briefly became the world’s number one oil exporter as record shale production found its way to global customers, and there are prospects for more, reported Bloomberg.
In a report, the International Energy Agency (IEA) said that surging output from shale helped America ship almost nine million barrels a day of crude and oil products in June, surpassing Saudi Arabia.
There is room to send even more supply overseas as companies add infrastructure to transport the burgeoning production from fields in Texas and New Mexico to the coast.
The swelling American output, as well as deepening concerns over global demand fuelled by a prolonged US-China trade war, have prompted a drop of almost 20 per cent in benchmark Brent crude from an April high.
The expansion in America’s exports in June was helped by a surge in crude-oil shipments to more than three million barrels a day, said IEA. At the time, Saudi Arabia was cutting its exports as part of the OPEC+ agreement, while Russian flows were constrained by the Druzhba pipeline crisis.
The Saudis reclaimed the top exporter’s spot in July and August as hurricanes disrupted US production and the trade dispute made it more difficult for shale shipments to find markets, added IEA.
As Saudi Arabia continues to curb production, the IEA said that America’s crude exports could rise by a further 33 per cent from June levels to as much as four million barrels a day as new export infrastructure gets built in the fourth quarter of this year.