An internal report reveals that OPEC is worried about the increase in oil production in the United States

11.30 from 19/10/2018 | Energy

Jason Hopkins | Energetic Investigator

Analysts from the Organization of the Petroleum Exporting Countries (OPEC) are keeping a close eye on US production and warn members that rising production in the United States could drive down oil prices.

OPEC officials fear that an increase in oil production in the United States and a seasonal accumulation of oil stocks may put downward pressure on oil prices, according to an internal document shared among members and reviewed by the Wall Street Journal. The report comes after Brent crude – which is used as a global benchmark for oil prices – fell below $ 80, to $ 78.69 a barrel. (RELATED: OPEC seeks to bridge the oil gap imposed by Iran's sanctions as US energy rumbles)

An imminent part of the report, which was circulated to OPEC officials on Thursday, said that a "seasonal reduction in refinery demand … could result in the build-up of oil stocks." The paper then noted that "the upward trend in crude oil production in the United States could be a bearish factor for oil prices in the coming weeks."

Following the insistence and public pressure of President Donald Trump, Saudi Arabia and Russia have agreed to increase oil production, an initiative that will help mitigate rising prices for a few years.

At a conference on energy held in Moscow on 3 October, Saudi energy minister Khalid Al-Falih revealed that his country produces 10.7 million barrels of oil a day, a rate close to his record of production established nearly two years ago. A source close to the discussion said that Russia and Saudi Arabia wanted to keep the news of the rise in production so as not to give the impression that they were working on Trump's orders, according to Reuters.

"We are responding to all barrel demands," Al-Falih said at the time. "We have increased production significantly. We just have to be responsive to the demand. "

At the same time, US production under the Trump administration is reaching new milestones.

"US crude oil production surpassed that of Saudi Arabia for the first time in more than two decades," the US Energy Information Administration reported in September. "In June and August, the United States surpassed the Russia in terms of crude oil production for the first time since February 1999. "

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