Global oil prices are expected to maintain a gloomy future in the immediate as U.S oil production continues to rise.
Reuters report that the U.S, which previously held the position of the world largest importer of oil, is expected to increase production of shale gas by up to 1 million barrels per day (bpd), which represents approximately 10 percent of the country’s crude output.
Ian Taylor, head of the world’s largest independent oil trader Vitol, told Reuters in an interview that oil is expected to trade at $40 to $55 at best, dashing hopes of prices soaring beyond $65 in the second quarter of the year.
“Everybody was positioned for a market rebalancing and a stocks draw to happen in the second quarter. And if you look at the macro analysis, that should start happening,” Taylor told Reuters. “But so far it hasn’t happened and everyone has made the same mistake. Nobody has distinguished themselves.”
Petroleum producing countries (both of OPEC and Non-OPEC) agreed to cut production of oil by about 2 million barrels per day (bpd) in a bid to curb the growing glut in the market. But the U.S has remained unrelenting in its effort to reduce dependency on oil imports, seeking rather to aggressively develop shale gas production.