2017.04.2002:58:00UTC+00Oil in Global Economy Series: Crude Oil Production in US at Highest Level Since August 2015

The increasing production in the United States is one of the biggest threats to the recovery in oil price as well as to the ability of the OPEC deal to curb supplies in the market. Last November, OPEC countries, and other 11 participating non-OPEC countries agreed to slash production by 1.8 million barrels per day by the first half of 2016. While the OPEC and other countries remain compliant with the deal, the production in the United States has increased by more than half a million barrels per day.

The latest data which covers production up to 14th of April show that the U.S. production has reached 9.252 million barrels per day, which is the highest level of production since August 2015. The production has now increased for nine consecutive weeks. Since bottoming at 8.428 million barrels per day in last July, the production in the United States has increased by more than 20,000 barrels per day on an average. In the past nine weeks, the growth has reached 30,000 barrels per day. At this pace, the crude production in the United States would reach close to 10 million barrels per day.

This increased production in the US is casting shadows over the possibility of an extension to the current OPEC deal, which expires in June this year. WTI si currently trading at $51.2 per barrel and Brent at $2.1 per barrel premium to WTI.