The U.S. will drive the bulk of growth in global oil production until 2024, according to the International Energy Agency’s Oil 2019 report released early Monday.
“The second wave of the U.S. shale revolution is coming,” Fatih Birol, the IEA’s executive director, said in a press release. “It will see the United States account for 70% of the rise in global oil production and some 75% of the expansion in [liquefied natural gas] trade over the next five years.”
“This will shake up international oil and gas trade flows, with profound implications for the geopolitics of energy,” he said.
The IEA report said the U.S. increase in global oil capacity would equate to a total of 4 million barrels a day and that follows “spectacular growth of 2.2 million barrels a day in 2018.”
The U.S. has “transformed itself” into a major exporter in less than a decade because of the ability of the nation’s shale industry to “respond quickly to price signals by ramping up production,” the report said. It will become a net oil exporter in 2021 as its crude and crude products exports exceed its imports and toward the end of the five-year period to 2024, the country’s gross oil exports will reach 9 million barrels a day to overtake Russia and draw closer to Saudi Arabia.
Demand for the five-year forecast period will depend on the strength of the global economy, the IEA said, adding that the International Monetary Fund recently downgraded its short-term outlook.
Still, the IEA sees global oil demand growing to 106.4 million barrels a day in 2024, from 99.2 million barrels a day in 2018. That’s an average annual growth rate of 1.2 million barrels a day and total volume increase of 7.1 million barrels a day—with China and India expected to account for 44% of that rise.
A monthly oil report from the IEA, which includes the latest data on supply, production and demand, will be released Friday.
Monthly oil reports are also due out from the U.S. Energy Information Administration on Tuesday and from OPEC on Thursday. The EIA will separately release a monthly forecast on U.S. shale oil production on March 18.
On Friday, May Brent crude LCOK9, +0.61% settled at $65.74 a barrel on ICE Futures Europe, down 56 cents, or 0.8%. April West Texas Intermediate crude CLJ9, +0.59% shed 59 cents, or 1%, at $56.07 a barrel on the New York Mercantile Exchange.
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