OPEC increases forecast for U.S. output

U.S. shale drillers could pump a lot more oil than previously expected this year, OPEC said this past week.

In a monthly report, the cartel said it has revised its 2017 forecast for oil production in countries outside of OPEC up by 370,000 barrels a day. More than three quarters of the increase will come from the U.S. — even as OPEC cuts oil production in a bid to support prices.

The Organization of the Petroleum Exporting Countries will gather in Vienna later this month to decide whether to extend the oil production cuts that, in recent weeks, seem to have lost their oil market luster as prices fall on new forecasts of higher U.S. shale oil output.

OPEC has been slower than other forecasters to acknowledge rising U.S. oil production. The U.S. Energy Department said domestic output will climb to a record 9.96 million barrels a day in 2018, up from 9.9 million barrels projected last month,

OPEC warned the U.S. surge could throw off its attempts to stabilize oil prices. Even though refiners are taking more oil from floating storage facilities, realigning global oil supply and demand by the end of the year would take “a collective effort by all oil producers,” the cartel said.

OPEC expects the U.S. oil production to rapidly increase by 614,000 barrels a day this year, while Canada and Brazil raise output a combined 430,000 barrels a day.

OPEC’s daily output decreased by 18,000 barrels to 31.7 million, independent sources said.

Oil prices have slipped recently over concerns that increased U.S. output is maintaining global supplies at high levels. Oil fell below $46 a barrel last week but later recovered after the Energy Department reported that U.S. crude inventories plunged by more than 5 million barrels. Crude settled in New York Friday at $47.84.