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The Brent crude price has rallied 130% since early 2016, underpinned by strong economic growth and production cuts from OPEC and its allies.
US crude production — already close to record-highs — is predicted to lift even further in the years ahead given easy access to new supply.
Commonwealth - Bank - Crude - End
The Commonwealth Bank sees Brent crude falling to $53 by the end of 2018.
Even with a recent wobble, crude oil prices have been on a tear in recent years, underpinned by the belief that production cuts from OPEC and its allies, along with firmer global growth, will help to balance the global market.
Threat - Outlook - Background - Production
But a threat to that outlook continues to lurk in the background: US crude production.
As seen in this chart from the Commonwealth Bank, productivity at major oil and gas fields is improving, creating a real risk that the rebalancing of the global crude market may be delayed.
US - Energy - Information - Administration - EIA
"The US Energy Information Administration (EIA) is forecasting US oil production will lift 13.6% to 10.59 million barrels per day (mb/d) this year, before rising another 5.6% to 11.18mb/d next year," says Vivek Dhar, Mining and Energy Commodities Analyst at the Commonwealth Bank.
"The increase in output has been helped by the rapid expansion in US oil rigs. US oil rigs are now at the highest level since April 2015, and have surged by around 150% since touching a...
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