The International Energy Agency said in its monthly market report that us oil production, which has already risen to its highest level in almost 50 years, will push past 10 million barrels a day in 2018 as higher prices entice more producers to start pumping.
Short-cycle production from the U.S.is reacting to rising prices and, given the 55% increase in crude futures since June 2017, IEA's forecast for USA production growth this year was revised up from 870,000 barrels per day (BPD) to 1.1 MMBPD.
Goldman Sachs is not ready to raise its $62 target on Brent and $57.50 forecast for USA crude in 2018, but says there's a growing risk that global inventories will fall too quickly and push up prices.
Excess oil inventories have declined by 220 million barrels from a level of 340 million barrels in early 2017, according to Al-Falih, who said he's uncertain the pace of drawdowns will continue in coming months.
OPEC met over the weekend to monitor the collective production cuts and assess the status of the oil market, and the meeting was shrouded in rumor about the potential cracks in the resolve of the group to keep the cuts in place through the rest of this year.
Higher oil prices could tempt members to cheat on their commitments, and the "explosive" growth of US shale also highlights the dangers of allowing oil prices to rise too high.
U.S. West Texas Intermediate (WTI) crude futures were at $57.72 a barrel at 0130 GMT, 27 cents, or 0.5 percent below their last settlement.
"We are at price levels where we can see an impact on demand and we have the risk of more shale coming" from rival producers in the USA, said Olivier Jakob, managing director at Petromatrix GmbH in Zug, Switzerland. Crude has surged 133 percent since hitting a multi-year low of $27.30 a barrel in February 2016. Brent, the global benchmark, rose 20 cents, or 0.29%, to $68.81 a barrel on ICE Futures Europe.
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The group said this was "driven by mostly higher growth expectations for the USA and Canada", and "Higher oil prices are bringing more supply to the market, particularly in North America and specifically tight oil", OPEC acknowledged.
Boosted by the resurgent shale industry, the IEA says United States crude production will likely climb above 10 million barrels a day in 2018, a level not seen since 1970.
However, the increase in shale oil production remains a concern for many producers.
Crude oil blazed through the first few weeks of the year, as signs of a supply-demand balance set off commodities bulls.
Global oil demand growth is forecast to stand at just above 1.5 m b/d, a slight upward adjustment compared to last month's report.
OPEC and its allies see merit in maintaining their output limits into 2019, Oman Oil Minister Mohammed Al Rumhy told reporters before a meeting to assess compliance with the accord. Russian Federation is estimated to have earned an extra $117 million a day and Saudi Arabia $100 million daily by limiting their output and nudging up prices.
Strong global economic growth and a drop in USA drilling activity also supported crude, traders said. Those events temporarily limited USA production and created a sharp drawdown in domestic supplies.
Global economic growth was also helping prices by driving up demand.