Dr Fatih Birol, Executive Director of the IEA, said: "The US is set to put its stamp on global oil markets for the next five years". In January, US production exceeded 10 million barrels per day for the first time since the 1970s. The EIA said weekly US crude production hit a record high per day last week of nearly 10.4 million barrels.
Beyond that, however, the agency warned that oil supply could become tight unless investment in new production rebounds from historic declines in recent years. "It is thus an illusion for Opec to think about abandoning the agreement to cut production".
Meantime, the cartel has been discussing alternative ways of measuring global supply to replace the OECD stockpiles estimate, which OPEC considers does not give accurate evaluation of the inventories.
Indeed, the IEA reports that the participants' oil inventories did actually drop dramatically - from 264 million barrels in December 2016 all the way down to 52 million barrels in December 2017. United States steel makers have largely abandoned this niche market in favour of higher volume products with less rigorous quality specifications. The deal requires the participant producers to cut supplies by 1.8 million barrels a day. Continuation of the dialogue between OPEC and the leading shale oil producers of the United States are in the interests of both sides, OPEC Secretary General Mohammed Barkindo said at the CERAWeek conference.
The dinner was just generalizations and platitudes, said Mark Papa, CEO of Centennial Resources Development Inc, who also attended. The components of the equilibrium of the oil market are dynamic and much will change in the upcoming months. In places like Libya, Yemen and Syria there is a lack of legitimacy in government. The thing is, that shale oil production is relatively costly, which makes it unprofitable at low oil prices. Expanding U.S. exports have eaten away at Mideast sales to Asia. If the USA implemented sanctions only targeting Iranian oil purchases, an initial year reduction could be up to 400,000-500,000 bpd. Cohn's resignation announcement came after the USA markets closed on Tuesday. However, the efficiency of the USA campaign could be significantly undercut if China or any other country decides to increase oil purchases from Iran as other buyers back out.
According to the Russian official, however, Russia intends to maintain oil production at current levels, despite any objections from OPEC.
The American Petroleum Institute (API) will release its weekly inventory data at 9.30pm GMT on Tuesday, and the USA energy department's Energy Information Administration (EIA) reports its data at 3.30pm GMT on Wednesday. How or when such measures are implemented is still unclear.
The prediction will place the U.S. ahead of all other nations including Russian Federation, who now leads the world in crude oil output at approximately 11 million barrels per day.
In a tweet linking to the report, Trump touted his administration's focus on "jobs and security". Cohn, a free trade advocate and former president at Goldman Sachs, had opposed Trump's plans for the proposed tariffs on aluminum and steel. The announcement immediately sent the Dow Jones Industrial Average down more than 400 points.
According to observers, shale oil producers have been increasing production to the detriment of OPEC countries, which had to limit production for the second year in a row.
The Organisation of Petroleum Exporting Countries, the producers' alliance that pumps 40% of the world's oil, is still in the lead when it comes to calling the shots in the oil market. Trump claimed that it was a move to "protect U.S. industry". In fact there is a real risk of trade wars at the moment.
Smith cites an article from the Financial Times that reported two weeks ago that Saldanha Bay storage had been emptied, according to Vitol's Chris Bake, quoting him saying, "stockpiles at important oil storage hubs, such as Saldanha Bay in South Africa, have been "emptied" and crude stored on tankers at sea, such as off the coast of Iran and Singapore, is all gone'".
Crude slipped after industry data showed U.S. crude stockpiles rose by more than expected last week. March's figure may be even weaker: only about 290,000 bpd.
US West Texas Intermediate crude futures advanced to $62.74 a barrel, up 17 cents, or 0.27%.
The United States was once reliant on oil imported from the Middle East to meet domestic demand but is now getting closer to its goal of producing enough oil for domestic needs for refined products like gasoline.
US oil inventories had risen by 2.4 million barrels in the week to March 02.
However, shale's surge in the last year was heavy on the minds at the Houston conference, particularly as USA production surged to an all-time record late last year.
Meanwhile, a new marine fuel rule with lower sulfur content that is to come into force in 2020 is creating uncertainty in the market.