Oil prices keep falling as U.S., OPEC boost output

Crude oil prices have fallen 10% in the past month, continuing a long-term slide brought on by oversupply worldwide.
By Lucas Rowe | Jun 15, 2017
Oil prices worldwide will stay low through 2018 due to surging output across the globe, a new International Energy Agency report release Wednesday forecasts. The report, which the agency releases every month, finds U.S. oil output nearing that of world heavyweight Saudi Arabia while the OPEC bloc boosts production despite member pledges to make cutbacks.

"Our first outlook for 2018 makes sobering reading for those producers looking to restrain supply," states the report.

Crude oil prices have fallen 10% in the past month, continuing a long-term slide brought on by oversupply worldwide.

Russia, OPEC, and nine other oil-producing countries had agreed last week to extend production cuts that they had instituted last November to March 2018 to bring down global oil supply and raise prices back up, though OPEC analysts find that the bloc's production is still trending upward and rose by 336,000 barrels per day last month, from 31.8 million barrels per day in May to 32.1 in June.

Analysts attribute much of this increase to Libya and Nigeria, which both ramped up production. These two nations are OPEC members but were exempted from the agreed-to production cuts.

Meanwhile, oil output in non-OPEC states is likely to rise by 700,000 barrels a day this year and by 1.5 million barrels a day next year, the report states. At this rate, production will continuously outpace any rises in global demand, which grew only 1% in 2016 and average 1.8% a year over the last decade.

U.S. production is reaching new highs in large part due to the fast-growing oil-shale industry, which extracts oil and gas from bituminous rock. U.S. oil output as a whole is up 10% from last year.

 

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