US energy strategy may affect oil and gas trade flows15 February 2017
One of the first moves of new United States President Donald Trump will be to try to reinvigorate US oil, gas and coal production. A recovery in oil and gas production is already under way following OPEC’s decision to cut production with non-OPEC support, which helped boost prices. The level of compliance has been impressive, and the cartel will discuss whether to extend the cuts when it meets in Vienna in June. Oil prices may also be supported by potential weakness in the dollar.
The increasing US oil and gas output will remain the predominant bearish factor preventing further gains in oil prices in the short term. US oil production has recovered from below 8.5 million barrels per day (MMb/d) to nearly 9 MMb/d in recent months, offsetting nearly one-third of the cuts pledged by OPEC and non-OPEC countries. It looks likely US output will rise back to its peak of 9.6 MMb/d, particularly if the OPEC cap is extended.
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