Another Bullish Shale Forecast Adds to Confusion as OPEC Gathers

  • Rystad sees American output at 9.9 million barrels next month
  • Differing views abound, with Hamm arguing boom overestimated

FGE's Brown Says Oil Needs to Stay Around $55 a Barrel

Add another bullish forecast for U.S. oil to the pile of confusion confronting OPEC.

Researcher Rystad Energy AS predicted Wednesday that American output may pass 9.9 million barrels a day by December, based on an analysis of company correspondence and state data. That would be 200,000 barrels above the latest U.S. government forecast.

“Largely due to Hurricane Harvey and seasonal maintenance in Alaska, production data for August gave the misleading impression that the United States’ shale production was incapable of sustainable growth" Rystad’s head of well research, Artem Abramov, said in a statement on the researcher’s website. “In reality, the gap between full production capacity and actual output exceeded 300 thousand barrels per day, which is unprecedented in recent years."

OPEC, Russia and other major crude suppliers have been dogged by uncertainty over the future of U.S. production as they head toward a meeting in Vienna Thursday on whether to extend output cuts.

The group heard optimistic outlooks last week from analysts including storied oil trader Andy Hall. Meanwhile, veteran U.S. oilmen including Continental Resources Inc. CEO Harold Hamm and former EOG Resources Inc. chief Mark Papa have argued in recent months that the world is overestimating shale’s potential.

“Strong United States oil output in early 2018 would require more concessions by OPEC to protect oil markets from a new dip," Rystad said on Wednesday.

— With assistance by Christopher Sell

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