Oil Output Is Increasing, Possibly Easing Prices, a Report Says
The International Energy Agency said in its monthly report that oil production was picking up in the United States.
Oil output is catching up with demand, possibly easing prices, a report says.
Oil rigs in the Gulf of Mexico. The United States is contributing the largest increases of any country, a report said. Credit…Marco Bello/Reuters
By Stanley Reed
Nov. 16, 2021, 7:24 a.m. ET
The International Energy Agency said Tuesday that oil supplies were catching up with demand, potentially easing upward pressure on prices. The agency, which is based in Paris, said that the oil market remained “tight by all measures, but that a reprieve from the price rally could be on the horizon.”
The forecast, contained in the agency’s Monthly Oil Report, could lend support to the arguments of the producers’ group, known as OPEC Plus, which in recent meetings has shrugged off requests from the Biden administration to accelerate production increases.
The United States is contributing the largest increases of any country, the report said. Oil output in the Gulf of Mexico has recovered more rapidly than expected from the ravages of Hurricane Ida in August and the pace of shale drilling is picking up, encouraged by high prices.
The I.E.A. reported that global production increased by a hefty 1.4 million barrels per day in October, or more than 1 percent of supplies, and that it expected another 1.5 million barrels a day to come on the market over November and December.
The report said that growth in demand was strengthening as countries including the United States opened their borders for international travel, spurring consumption of jet fuel that has so far lagged other petroleum products.
OPEC Plus, which is led by Saudi Arabia and Russia, agreed in July to raise output by a modest 400,000 barrels per day each month. OPEC Plus has expressed concern that bigger increases could result in supplies outstripping demand next year, potentially causing prices to plummet.
The group also has argued that although oil prices may have risen sharply this year — presently about $82 a barrel for Brent crude, the international benchmark, and $81 per barrel for West Texas Intermediate, the U.S. standard — the increases have been modest compared to the rocketing prices of other energy including natural gas and electric power.