In the closely watched IEA Oil Market Report, the agency predicts that the USA will reaffirm its position as the world’s leading crude oil producer. OPEC nations together with a number of non-OPEC producers have recently agreed to further reduce output in an effort to maintain oil prices above their recent lows achieved through a pre-Christmas supply glut and weakened demand.
With major producers Saudi Arabia and Russia keeping supply off the market, the US has edged into the top spot in recent months, and it looks as though this will be the case for the rest of 2019. The USA is increasing its production and aiming to reassert itself on the global stage to increase market share. To put the situation into numbers, the US is currently producing at a rate of 11.9 million barrels per day, up over 2 million barrels in recent months.
Demand for oil is growing steadily, however, major economic growth is cooling down which may start to affect the demand side of the market pushing prices even lower should output levels remain unchanged. Consumers are benefiting from the lower prices with reduced fuel costs, however, many companies such as airlines and delivery services are reluctant to pass on any savings to their customers.
NRG Expert does predict that 2019 will be a volatile year for oil prices, but our medium-term outlook remains unchanged that oil will again climb closer to $100 in 3-5 years.