Just a couple of days ago, it was reported that Oil prices increased due to limited U.S. drilling activity. Oil prices are affected by U.S. onshore oil drilling which was insufficient few weeks ago which increased the prices of crude oil.
Today Reuters reported that oil prices are declining due to actively rising U.S. Crude oil output weighed on markets. According to the data U.S. West Texas Intermediate (WTI), crude futures were at $61.25 per barrel at 0414 GMT, it was down 11 cents equivalent to 0.2 percent from the previous close.
Brent crude at $64.85 per barrel, which was down 10 cents equivalent to 0.2 percent as well from the previous close, both benchmarks dropped by 1 percent in Monday sessions.
The interesting part is U.S. Crude Oil Production soared and have past 10 million barrels per day during the end of last month, the production is now crossing the largest exporter Saudi Arabia.
Additionally, U.S. crude oil production is expected to grow further and reach 11 million barrels per day by the end of 2018, toppling Saudi Arabia and Russia as the world’s largest crude oil producer—Said International Energy Agency (IEA).
In January CNBC reported that the U.S. will overtake Russia and Saudi Arabia within next 12 months and become the world’s largest oil producer. The country’s rising output is cushioned largely by the onshore shale oil production. According to the report by EIA, U.S. crude production from shale formations is expected to rise by 131,000 barrels per day in April from the previous month to record high 6.95 million barrels per day.
If this continues, U.S. will become the largest oil producer in the world, meanwhile, U.S. oil imports would also decrease amid falling oil prices in 2018 and 2019 in the international markets.
Analysts say the increasing U.S. oil production would affect OPEC agreement largely and affect the prices in the International markets.