U.S. oil production jumped to a record 11.6 million barrels a day last week, and rising U.S. output is a factor that could prompt OPEC members and allies to react when they meet over the weekend.
Oil prices have cratered amid concerns of a global supply glut, and the jump in U.S. output to a point where it is now surpassing Russia, in addition to Saudi Arabia, only adds to these concerns. West Texas Intermediate futures are now down 20 percent from the near four-year high reached on Oct. 3.
U.S. production is up a stunning 2 million barrels a day from the same period last year, and 400,000 barrels from the week earlier, based on weekly U.S. government data. Weekly numbers are often revised, but the higher production figure is in line with growing U.S. output expectations. The U.S. government expects October production was 11.4 million barrels a day and expects production can grow to 12.1 million barrels a day on average next year.
“US crude oil production was recorded at a new record high, and the largest in the world by far, moving ahead of Russia and closer to the level Saudi Arabia might be able to reach in another six months,” wrote Citigroup energy analyst Eric Lee.
OPEC’s Joint Ministerial Monitoring Committee will meet this weekend in Abu Dhabi, ahead of next month’s broader meeting in Vienna, and production levels are expected to be discussed. Saudi Arabia, de facto leader of OPEC, and Russia had agreed to raise production ahead of U.S. sanctions on Iranian oil, and the joint committee could decide to recommend lowering production.