IEA: Get Ready for a Price Spike

So far, the largest additions to the oil market will come from the USA, with its light tight oil production expected to rise by 1.4 MMBPD by 2022 if prices remain around $60/Bbl – expectations are higher now than past year because of “impressive” production gains, the IEA said.

From a figure of 19.9 million barrels in 2015. In December, former President Barack Obama authorized expanded USA sanctions against Russian Federation for intervening in the US election.

WTI light sweet crude oil was down 13 cents, or 0.2%, to settle at $53.20/bbl on Nymex. The pace of output growth reaches 3 MMbpd when crude oil prices are above $80 per barrel.

The country’s heavy oil price was reported $52.46 on average since the beginning of 2017 until February 24. While U.S. imports of primarily crude oil from Venezuela have been on the decline, U.S. exports of petroleum products to Venezuela have increased largely because of Venezuelas tight finances that leave it unable to invest and maintain its own domestic refineries.

“They’ve gone so far on hopes and dreams”, Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, said by telephone.

“With $55 a barrel, we see everyone very happy in the US”, Didier Casimiro, a senior executive at Moscow-based Rosneft PJSC, told Bloomberg.

Birol pointed out that one-third of global oil demand growth will come just from Asian trucking. That ranks it as fourth in terms of major producers who pay the most to get the commodities out of the ground. “They deeply appreciate the efforts of OPEC and non-OPEC”, he noted.

Furthermore, in a case where oil trades at $80 per barrel, US light, tight will increase by an enormous 3 mbd in the next five years, nearly double the base case scenario. American production is set to top nine million barrels over the course of 2017, the analysts estimate, due to rejuvenated capital expenditure budgets and higher output capacity. “Assuming Maduro is still in office, by end of the year we expect Venezuelan production between 1.7 and 1.8 million barrels per day”. Developing countries, primarily in Asia, account for all the projected growth, or roughly 70% of production growth.

U.S. oil rig count rose by seven from a week ago to 609 in the week to March 3, Baker Hughes reported Friday.