U.S. oil production nears 47-year record as shale booms: Kemp


Its oil production dropped sharply in the last couple of years under the pressure of field mismanagement, underinvestment, and US sanctions. Over the medium-term, US shale will ramp up and OPEC will abandon the production cuts, stamping out any chance of higher prices on a sustained basis.

The environment for investing in commodities is the best since 2004-2008, Goldman Sachs said on Thursday, saying it expects returns of 15 percent over the next six months and of 10 percent over the next year. Goldman predicts that prices for the global benchmark Brent crude, now trading at about $70 a barrel, will increase to $82.50 in six months. Brent Crude Oil price at London's IСE Stock Exchange up by 1.20% to $69.82 per barrel. The bank also said rising United States shale supply will be needed to keep the market steady in the near-term, since any ramp-up in OPEC production will lag the rebalancing.

However, the increase of USA oil production exceeded 10 million barrels per day in November, for the first time since 1970 and neared the historical maximum in that country, said on Wednesday the International Energy Agency (IEA). USA oil prices are hovering near $66 a barrel, well below the 2014 peak of $107 a barrel, but more than $20 a barrel above the $42 in mid-2017.

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Saudi energy minister Khalid al-Falih, who chairs a six-country monitoring committee overseeing the OPEC/non-OPEC production cut agreement, suggested at a January 21 meeting in Oman that the coalition may need to be more nimble with its inventories target and tweak it to take into account crude grades and regional inventories. Non-tight oil production has been mostly constant over the previous decade. At 418.4 million barrels, US crude oil inventories are in the middle of the average range for this time of year. That's a number that challenges daily production of just less than 10mn barrels by Saudi Arabia in December and nearly 11mn by Russian Federation a year ago. November's production is the first time since 1970 that monthly US production levels surpassed 10 million b/d and the second-highest USA monthly oil production value ever, just below the November 1970 production value of 10.044 million b/d. These formations also produce considerable volumes of natural gas associated with the crude oil.

Output from Venezuela, once the largest producer in Latin America, has been on a chronic decline because of mismanagement and lack of funds.

Today, crude oil is gaining to recover some of the gains it had yesterday. That's the highest level since November 1970 in monthly data collected by the U.S. agency since 1920.