Output of shale oil in the U.S. is ready to make a surge over the upcoming five years as drillers have recovered rapidly from a slump of three years, said the International Energy Agency on Monday. It sharply upgraded its previous forecasts for growth.
A huge deal during 2017 between members of OPEC and other producers of oil such as Russia to cut back on the global glut, materially improved outlooks for other oil producers as the prices of oil rise sharply during the year, said IEA.
Production that is outside of OPEC is projected to increase by as much as 5.2 million barrels daily by 2023.
Production of shale oil is expected to represent more than half of the output growth for the world of 6.3 million bpd, said the IEA in its outlook report of five years.
Despite capital discipline talk and more of a focus on returns and not growth, producers in the U.S. regrouped quickly after a stabilization of oil prices followed by prices rising, said IEA.
U.S production of crude oil is expected to rise by over 2.7 billion to slightly more than 13.1 billion barrels per day by 2023 due to growth from shale, which is known as light tight oil, will more than offset the drops in conventional supply.
Another 1 million barrels per day will be added by natural gas liquids to reach over 4.7 million barrels daily in 2023.
With production of total liquids reaching close to 17 million barrels per day during 2023, which was up from its 2017 amount of 13.2 billion, the U.S. will by far be the world’s top producer of oil liquids.
In 2107, production rose by a total of 670,000 barrels per days and 200 rigs were added by drillers, which beat all expectations said IEA.
In 2017, the ICA made a forecast that shale production in the U.S. would grow at the rate of 1.4 million barrels per day by 2022, with prices of oil being as high as $60 per barrel and up by over 3 million daily with prices of as much as $80 per barre.
The cut back by OPEC and other non-OPEC oil producing nations has helped to push the current per barrel price of crude to over $60.