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'Colossal' American oil boom could spoil OPEC's plans

This is the kind of stuff that keeps OPEC up at night.The oil cartel and key ally Russia have spent more than ...

Posted: Feb 13, 2018 2:24 PM
Updated: Feb 13, 2018 2:24 PM

This is the kind of stuff that keeps OPEC up at night.

The oil cartel and key ally Russia have spent more than a year trying to drain the world of excess supply. But the International Energy Agency warned Tuesday that a "colossal" oil boom in the United States could ruin their efforts.

The Paris-based agency said that a massive increase in output means the U.S. will soon be producing more oil than Saudi Arabia. It could soon challenge Russia for the global crown.

The manic American pumping, which the IEA estimates will average 10.4 million barrels a day this year, could cause a glut to return to global markets.

"U.S. producers are enjoying a second wave of growth so extraordinary that in 2018 their increase in liquids production could equal global demand growth," the IEA said in its latest monthly report. "This is a sobering thought for other producers."

Related: U.S. could become world's biggest oil producer in 2018

The IEA said the surge, which is powered by shale, is "reminiscent" of 2014, when booming production in the U.S. prompted OPEC to flood the global market with oil in an attempt to protect its market share.

The strategy led to a price collapse that sent crude to a low of $27 per barrel in 2016 from well over $100.

Plunging prices forced some higher-cost U.S. producers to close up shop. But many emerged leaner and stronger than before.

OPEC and other major producers including Russia agreed to slash their output in late 2016 in order to reduce the glut and help boost prices. The agreement has been extended until the end of 2018.

But there are signs that the strategy may be losing its effectiveness.

Crude prices dropped 10% last week, falling below $60 a barrel for the first time this year. U.S. oil futures were volatile on Tuesday, at points dipping under $59.

Related: Venezuela's oil production is plummeting

The IEA did note two wild cards: The political crisis in Venezuela and a strengthening global economy, both of which could change market dynamics.

"Prices could be maintained at recent levels even as U.S. production rises," the agency said. "If so, most producers will be happy, but if not, history might be repeating itself."

Minnesota Coronavirus Cases

Data is updated nightly.

Cases: 610839

Reported Deaths: 7749
CountyCasesDeaths
Hennepin1266401800
Ramsey53172911
Dakota47328475
Anoka43323465
Washington27717296
Stearns22703227
St. Louis18297319
Scott17719139
Wright16561153
Olmsted13549103
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Carver1075749
Clay829692
Rice8261111
Blue Earth771944
Crow Wing689599
Kandiyohi670885
Chisago627654
Otter Tail591187
Benton586698
Goodhue486174
Douglas479281
Mower478233
Winona464652
Itasca463168
Isanti446667
McLeod435161
Morrison428462
Beltrami410763
Nobles410150
Steele401419
Polk390772
Becker389457
Lyon365554
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Pine337823
Nicollet334545
Mille Lacs315456
Brown308840
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Cass288633
Todd288633
Meeker266244
Waseca241023
Martin237233
Roseau212421
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Hubbard198341
Dodge19023
Renville183946
Redwood178541
Houston175916
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Fillmore159710
Faribault157220
Chippewa154138
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Stevens92611
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Grant5958
Lincoln5863
Mahnomen5669
Norman5509
Kittson49122
Unassigned48793
Red Lake4037
Traverse3835
Lake of the Woods3484
Cook1740

Iowa Coronavirus Cases

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Cases: 374664

Reported Deaths: 6109
CountyCasesDeaths
Polk58891646
Linn21448342
Scott20426250
Black Hawk16680319
Woodbury15319230
Johnson1473686
Dubuque13595213
Dallas1144099
Pottawattamie11307177
Story1082848
Warren592092
Clinton564393
Cerro Gordo562297
Webster538996
Sioux519174
Muscatine4920106
Marshall491479
Des Moines478275
Jasper452073
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Buena Vista431040
Plymouth404982
Lee392658
Marion369177
Jones301257
Henry301037
Bremer292763
Carroll286252
Boone271234
Crawford270841
Benton262755
Washington259851
Dickinson250745
Mahaska232551
Jackson225842
Kossuth219166
Clay217327
Tama213372
Delaware211743
Winneshiek200636
Buchanan196734
Page195422
Cedar192923
Hardin191144
Wright189140
Fayette188243
Hamilton186851
Harrison181973
Clayton173057
Butler167835
Madison167719
Floyd164642
Mills163824
Cherokee161538
Lyon160941
Poweshiek159036
Allamakee155552
Hancock153134
Iowa148324
Winnebago145731
Calhoun143113
Cass140855
Grundy139333
Emmet136741
Jefferson134535
Sac132620
Shelby131838
Louisa130249
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Appanoose128049
Franklin127823
Mitchell127243
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Humboldt124526
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Keokuk99932
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Adair89632
Davis86825
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Greene79111
Osceola79017
Lucas77423
Worth7568
Taylor67112
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Van Buren56718
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