It seems that only a few weeks ago oil prices were rising and many analysts said it was inevitable that a barrel of crude would cost $100 again. That changed quickly. U.S. crude oil hit the bear market level this month, declining more than 20% from its recent high. Analysts now say there’s more supply than demand and little likelihood of a turnaround.
Tempering some of the enthusiasm was data showing U.S. output reached a new record high of 11.6 million bpd, and a forecast that it would grow far more quickly next year than many previously expected.
The United States has now surpassed Russia to become the world’s largest oil producer and the Energy Information Administration said this week it expects output to top 12 million bpd by the middle of 2019, thanks to shale oil.
Production has not just risen in the United States, but also in many other countries, including Russia, Saudi Arabia, Iraq and Brazil, and threatens to overtake demand next year.