Economy

Oil rises to $67 on cuts to Saudi, Venezuelan exports

Oil rises to $67 on cuts to Saudi, Venezuelan exports

The agency suggested that US' crude oil exports will almost double, reaching about 9 million barrels per day by 2024, which means it has a tangible chance of surpassing Russian Federation and even Saudi Arabia at that point.

USA oil output, including natural gas liquids (NGLs) and other hydrocarbons, will climb to 19.6 million bpd by 2024 from 15.5 million past year, the Paris-based agency said. Furthermore, the recent price action and the market's ability to regain its composure after recent concerns over demand drove prices lower, suggest that any further tightening in the physical crude balance could lead to a new high for the year over the near-term.

Saudi Energy Minister Khalid al-Falih told Reuters two days ago that it would be too early to change a production curb pact agreed by the Organisation of Petroleum Exporting Countries (OPEC) and its allies, which includes Russian Federation, another major producer, before June.

However, OPEC member Iraq, which failed to observe its commitment to the organization several times in the past, is set to reinforce its position as one of the world's top producers, according to the IEA.

Oil prices have been receiving broad support this year from supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and non-affiliated allies like Russian Federation aimed at tightening markets.

"The United States is increasingly leading the expansion in global oil supplies, with significant growth also seen among other non-OPEC producers, including Brazil, Norway and new producer Guyana", the IEA, an adviser to the United States and other industrialized countries, said in its five-year outlook.

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The story that has been underpinning prices is the OPEC-led supply cuts that have been trimming about 1.2 million barrels per day since January 1.

"The second wave of the United States shale revolution is coming", the IEA's Fatih Birol said.

With Venezuela output falling further due to US sanctions and power blackouts, oil refiners put in requests - or nominations in industry jargon - for Saudi crude of more than 7.6 million barrels a day for April, the person said. "The second wave of shale production growth is coming".

With a projected 2.3 million barrel of crude oil production per day and $60 oil benchmark in the 2019 budget, the rise in the oil prices, they say is healthy for the finance of the budget which has an unprecedented huge capital expenditure component.

Even so, the IEA does not expect moves such as greater adoption of electric cars to put a cap on demand growth yet. The 2023 figure is up by just 600,000 bpd from this year and less than the previous forecast.

"The increase will have to compensate for steep losses from Iran and Venezuela, as well as a still-fragile situation in Libya", the IEA said.