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US on course to become world’s top oil producer–IEA

US on course to become world’s top oil producer–IEA

Mubasher: The US is expected to become the world’s top oil producer, having surpassed Saudi Arabia for a while earlier this year, according to the International Energy Agency (IEA).

“Booming shale production has allowed the US to close in on, and briefly overtake, Saudi Arabia as the world’s top oil exporter,” the IEA said in its closely-watched monthly report on Thursday.

Last June, the US overtook Saudi Arabia as the biggest oil producer, after crude exports climbed above 3 million barrels per day (bpd), sending total exports of crude and products to around 9 million bpd.

However, after hurricane disruptions in the US, Saudi Arabia clawed back its position in July and August.

The Paris-based energy watchdog projected that the US will “see a further build out of export infrastructure that should allow for up to 4 million [bpd] in crude exports.”

“The installation of the necessary pipelines and terminals is continuing apace, which will ensure that the trend continues,” the IEA said.

On a side note, the agency kept its oil demand growth outlook unchanged at 1.1 million bpd for this year, and 1.3 million bpd for next, assuming an end to the deterioration of the economic conditions and resolutions for trade feuds.

Demand would be “significantly higher” due to a comparatively low base in the second half of last year, lower oil prices and additions to petrochemicals, the IEA said.

This came one day after the Organization of the Petroleum Exporting Countries (OPEC) downgraded its oil consumption forecasts for the remaining months of 2019 and 2020.

By 2:00 pm GMT, US Nymex crude futures fell by 2.24% to $54.50 per barrel (pb), while global benchmark Brent futures dropped by 2.29% to $59.42 pb.