Oil prices edged higher toward $65 per barrel on Monday but predictions of a major spike in U.S. oil output in the next five years capped the market’s gains.
International benchmark Brent crude was up 36 cents, or 0.6 percent, at $64.73 a barrel by 1028 GMT. The contract was well below this year’s highs of over $71 per barrel that it hit in January.
U.S. West Texas Intermediate (WTI) crude rose 42 cents, or 0.7 percent, to $61.67 per barrel.
The International Energy Agency on Monday revised U.S. oil output growth up sharply, saying the country would be producing a total of nearly 17 million barrels per day in 2023, up from 13.2 million last year, eating into OPEC’s market share and moving closer to self-sufficiency.
The IEA, which advises industrialized nations on energy policies, also said it expected oil demand growth to average a fairly robust 1.1 percent a year to 2023 and said OPEC would fail to significantly increase its production capacity.
“Oil production growth from the United States, Brazil, Canada and Norway can keep the world well supplied, more than meeting global oil demand growth through 2020,” the IEA said in its mid-term market report.
“One thing hasn’t changed over the past year, however. Upstream investment shows little sign of recovering from its plunge in 2015-2016, which raises concerns about whether adequate supply will be available to offset natural field declines and meet robust demand growth after 2020,” it added.
Oil ministers from the Organization of the Petroleum Exporting Countries (OPEC) and other global oil players are set to gather in Houston as CERAWeek, the largest energy industry conference, begins on Monday.
OPEC Secretary General Mohammad Barkindo and other OPEC officials are expected to hold a dinner on Monday with U.S. shale firms on the sidelines of the conference.
Suhail Mohamed Al Mazrouel, the United Arab Emirates oil minister and OPEC’s current president, said on Sunday that the oil cartel has not discussed rolling over production cuts next year.
U.S. crude oil production has already risen past that of top exporter Saudi Arabia, to 10.28 million barrels per day (bpd).
The number of oil rigs drilling for new production in the United States [RIG/U] rose to 800 for the first time since April 2015 in early March, pointing to more increases in output to come.
