Surge in U.S. shale has eaten into OPEC’s total market share
OPEC’S OUTPUT FELL IN MARCH, WHILE U.S. SHALE STEAMED AHEAD
OPEC said Thursday its crude oil output fell last month amid compliance with the oil cartel’s agreement to cut production, even as the world’s total oil supply continued to rise on the back of burgeoning U.S. shale growth.
In its closely watched monthly oil market report, the Organization of the Petroleum Exporting Countries said the group’s total crude output declined by 201,000 barrels a day in March in month-on-month terms, to average 31.96 million barrels a day. The drop was mainly attributable to lower production in Angola, Venezuela, Algeria and Saudi Arabia.
But OPEC said that the world’s total oil supply rose by 180,000 barrels a day last month, mainly as a result of higher output from non-OPEC producers like the U.S., Norway and the U.K.
U.S. shale fracking is one of the primary drivers of non-OPEC production, with tight and shale formations expected to account for 94% of total petroleum liquids growth this year, compared with 90% in 2017, OPEC said in the report.
The surge in U.S. shale, combined with the oil cartel’s efforts to rein in production, has meant that OPEC’s total market share has been declining. OPEC said its slice of crude oil in total global production was down by 0.3 percentage points in March, at 32.6%, in month-on-month terms.
OPEC and 10 producers outside the cartel, including Russia, have been holding back crude output by 1.8 million barrels a day since the start of last year, as part of a coordinated effort to rein in a global supply glut that has weighed on prices since the end of 2014.