How high will US oil production be in 2018

US production continues to move ever upward, gaining by 73k b/d last week to within sniffing distance of 9.8m b/d. exports are holding above 1m b/d with a four-week average of 1.4m b/d. Overall crude stocks fell but across the rest of the barrel there were builds in gasoline, jet and fuel oil. The demand story is looking increasingly shaky in the US as we move into 2018 and the expected stimulus from the Republican tax reform is unlikely to have much of an impact on fuel demand.    

Onward and upward?

Source: EIA, Emirates NBD Research

As we look to next year, the market is likely to be fixated on US data to an overbearing degree. With OPEC seemingly heading off the field, for at least six months, expect EIA data, rig counts, investor positions and the greenback to the near-term drivers for oil prices. Is 10m b/d of US crude production going to happen next year? All signs for now are pointing to yes. A focus on profitability will be important for oil and gas producers in the US but with accommodative prices and financing conditions we expect to see more and more US oil finding its way across the global oil system. 

Click here to download the full chartpack