EIA raises United States oil production growth forecast for 2018

A flag with the Organization of the Petroleum Exporting Countries logo is seen during a meeting of OPEC and non-OPEC producing countr

A flag with the Organization of the Petroleum Exporting Countries logo is seen during a meeting of OPEC and non-OPEC producing countr

Saudi Arabia and Russian Federation helped secure a deal between the Organization of the Petroleum Exporting Countries and 10 rival producers to cut output by about 1.8 million barrels per day (bpd) until the end of March 2018 in an effort to reduce a glut.

OPEC and other producers are looking to create an extension to their deal to cut production ahead of the official November meeting of the cartel.

In the meantime, Investment Bank Barclays raised its Brent crude price outlook for the first quarter of 2018 to 56 dollars a barrel.

OPEC said the world would need 33.06 million barrels per day (bpd) of its crude next year, up 230,000 bpd from its previous forecast. It said that Aramco planned to supply 7.15 million barrels a day, "despite a very strong demand", which exceeds 7.7 million barrels a day.

Oil prices also gained support by the International Monetary Fund's prediction that global economic growth is expected to be 3.6% this year and 3.7% next year.

"I think the market is able to absorb that 2 million bpd of USA exports easily", Glencore's head of oil trading Alex Beard told the Reuters Global Commodities Summit.

"OPEC and key non-OPEC oil producers continue to successfully drain the oil market of excess barrels".

The report also cited headwinds in 2018 for an expansion of supplies in US shale, such as lower drilling efficiency and cost inflation.

Oil prices have been rising since the end of summer, but remain well below their 2014 level.

Currently, the EIA expects total US crude oil production to average 9.3 million bpd for 2017 and 9.8 million bpd in 2018, which would mark the highest annual average production in USA history, surpassing the previous record of 9.6 million bpd from 1970.

This is up from 83 percent initially reported in August, as September's rise in overall OPEC output was led by Nigeria and Libya, which are exempt from the cut.

The report's OPEC production figures mean compliance with the supply cut by the 11 members with output targets remains high at 98 percent, according to a Reuters calculation.

Opec said it pumped 32.75 million bpd in September, up about 89,000 bpd from August.

Read: What happens if OPEC maintains current levels of production?

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