WE NEED TO SEE PRICES IN THE SHORTTERM TRADE BELOW US$60…

trast to bullish views from Royal Bank of Canada and Goldman Sachs Group Inc. to BMI Research and Société Générale SA, which see prices supported as strong demand soaks up supply from the U.S. While Patterson does see healthy oil consumption, he said growth may slow and fail to completely absorb gaining American output.

While the U.S. is now pumping more than 10 million barrels a day, surpassing a record set in 1970, that boom is being accompanied by a surge in overseas shipments, helping drain stockpiles at the nation’s largest storage hub. Exports have averaged about 1.5 million barrels over the past six months, almost double the level in the previous six months, Energy Information Administration data show. Asia is the biggest buyer of the supplies.

OPEC should beware as U.S. shale producers are set to steal a bigger slice of the market in Asia, which consumes more oil than any other region, according to industry consultant Wood Mackenzie Ltd. Crude shipped overseas from the U.S. will soar to almost 4 million barrels a day by the mid-2020s, rivalling shipments from Iraq and Canada, it said last week.

Asia is “a market that the Middle East does not really want to give up,” ING’s Patterson said. “We think compliance is likely to slip. The deal will still officially be in place, but once we get into 2019 there’s no chance that we will see some sort of deal.”