United States oil output to surpass record earlier than expected

Weekly Gas Prices Since 2000

The Energy Department believes US crude production will climb above 10 million barrels a day in the first quarter of this year, nine months earlier than previously anticipated. At the same time, analysts had expected the figure to decrease by only 3.9 million barrels. If the prediction is accurate, the USA would become the top oil producer in the world and beat both Saudi Arabia and Russian Federation for the first time since 1975. Russian Federation produced an average of almost 11 million barrels per day in 2017, while Saudi Arabia produced about 10 million barrels.

Despite the rising production, oil prices edged higher on Tuesday, with USA crude touching its highest since December 2014, closing at $62.96 a barrel. As a result, pipeline capacity constraints should not be a major limiting factor in starting new production, he said.

West Texas Intermediate (WTI) crude will average 55.33 USA dollars a barrel this year, the EIA said, up from last month's estimate of 52.77 dollars, and 57.43 dollars in 2019.

Much of the production growth will be concentrated in the Permian Basin, the largest USA oilfield stretching across Texas and New Mexico, said John Staub, the EIA director of the office of petroleum, natural gas and biofuels analysis.

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Last week, the API reported a large draw of 4.992 million barrels of crude oil, along with an increase in gasoline inventories of 1.87 million barrels.

USA demand growth of 150,000 bpd was estimated for 2017, slightly lower than previous expectations.

Net U.S. crude imports rose last week by 152,000 bpd.

Standard Chartered analysts said in a note, "We expect oil demand growth to outpace non-OPEC supply growth in both 2018 and 2019; in our view, the back of the Brent and WTI curves are both still underpriced [and] we do not think that prices below $65 per barrel are sustainable into the medium term".