U.S. output still expanding

“The longer the deal goes on, it’s going to start falling apart,” Patterson said in an interview in Singapore, referring to an output-cut agreement between the Organization of Petroleum Exporting Countries and other producers including Russia. “They continue to give market share away to the U.S.”

Brent crude, the benchmark for more than half the world’s oil, traded at US$65.07 a barrel at 10:11 a.m. in London on Monday, compared with about US$45 in June. ING forecasts Brent at US$57 in the second half of 2018.

Prices were at more than US$115 in mid-2014, before a global glut sparked the biggest crash in a generation. West Texas Intermediate, the U.S. marker, is currently near US$62 a barrel.

Crude’s rebound since last year is encouraging American drillers to pump even as they make efforts to be disciplined on spending, Patterson said. “We need to see prices in the short-term trade below US$60 to reduce that incentive for U.S. producers,” he said.

As American output continues to expand, more exports will sail to Asia, the traditional bastion of Middle East producers. In February, even Saudi Arabia’s state oil company considered participating in these flows via a U.S. unit, before determining it wasn’t economically viable at the time.

ING’s outlook is in con-