As U.S. Oil Production Surges, OPEC Stays The Course

Investing.com – Global demand this year may be higher than OPEC originally estimated, but so is production from non-cartel members such as the U.S. OPEC won’t benefit if it remains committed to a 2017 agreement with Russia and other producers to hold back 1.8 million barrels of oil a day from the market.Thus far, OPEC’s production cut has paid off, with oil prices substantially higher than they were a year ago.The trend, however, may be in jeopardy. After a surprisingly strong start to the year, oil prices have fallen back recently, with the benchmark U.S, crude dipping below $60 a barrel. The question is whether that’s a short-term blip or a major turning point.As prices have risen since mid-2017, so has U.S. output from its vast shale oil fields.U.S. production is up to 10 million barrels a day, equal to Saudi Arabia’s, and should surpass No. 1 Russia’s 10.95 million barrels a day in the second half of this year.Overproduction triggered an oil collapse in 2014. There’s always the chance that can happen again.

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