The United States is set to become the world’s largest oil producer, according to a new report from the International Energy Agency (IEA).
Crude oil output from America increased by a “colossal amount” in the three months to November to 86 thousand barrels per day.
The IEA says this will soon overtake Saudi Arabia and could also outpace Russia by the end of this year to become the global leader.
Fast-rising production from non-OPEC counties, led by the US, is likely to outweigh demand according to the IEA document.
The Paris-based agency forecasts global demand of 1.4 million barrels of oil per day, however that is set to be outpaced by non-OPEC output growth.
The report states: “All the indicators that suggest continued fast growth in the US are in perfect alignment; rising prices leading, after a few months, to more drilling, more completions, more production, and more hedging.
“In early 2018, the situation is reminiscent of the first wave of US shale growth that, riding the tide of high oil prices in the early years of this decade, made big gains in terms of market share and eventually in 2014 forced a historic change of policy by leading producers.
“Today, having cut costs dramatically, US producers are enjoying a second wave of growth so extraordinary that in 2018 their increase in liquids production could equal global demand growth.
“This is a sobering thought for other producers currently sitting on shut-in production capacity and facing a renewed challenge to their market share.
“Another sobering thought is that it is not just a matter of production: trade patterns are changing. Recently we read of a shipment of condensate from the US to the UAE.
“Such a development would have seemed incredible a few years ago, now it looks like the shape of things to come.”