American oil output will overtake OPEC's by 2024
- OPEC's World Oil Outlook for 2019 found that output will fall over the next five years, while America's shale oil production will overtake that of the group.
- The Organization of the Petroleum Exporting Countries' supply has fallen in the last few years due to a pact with Russia, boosting oil prices.
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OPEC, the Organization of the Petroleum Exporting Countries, said that the US will overtake it in terms of crude oil output within the next five years.
In its World Oil Outlook 2019 report released on Tuesday, OPEC said it expects its own output to fall to 32.8 million barrels a day by 2024, compared to the 35 million it's producing in 2019.
Comparatively, non-OPEC production led by US shale is expected to increase to 72.2 million barrels a day in 2024 compared to the 64.4 million barrels it produced in 2019.
OPEC is made up of 14 members, including the de-facto leader and oil-producing powerhouse Saudi Arabia. The group's production has fallen substantially in the last year after an agreement with Russia late last year cut crude oil output. Since January 2019, crude oil prices have risen 15%. Total energy demand is expected to increase by 72 million barrels by 2040, at about 1% per annum.
In the report, OPEC said that 60% of the production growth is expected to come from the US, predominately from Alaska and the Gulf of Mexico, in the form of shale.
"Non-OPEC supply prospects have been revised up sharply, as US tight [shale] oil, in particular, has again outperformed expectations," said Mohammad Sanusi Barkindo, secretary-general of OPEC, in the report.
"While there continues to be talk of more financial prudence in the tight oil patch, prospects for growth remain given that efficiency and technology gains have further increased," Barkindo added.
In January the US Energy Department said that the US would become a net export of energy by 2020, as the country ramps up its efforts to become less reliant on external sources.