Crude at $60 a barrel would probably trigger a strong increase in North American oil output, the head of the International Energy Agency said, amid signs that OPEC members and Russia may be edging toward an agreement to limit production.
Benchmark Brent crude hit a one-year high above $53 a barrel on Monday when President Vladimir Putin said Russia was willing to work with the Organization of Petroleum Exporting Countries to stabilize the market. A deal could lift prices as high as $60 by the end of this year, Saudi Arabia’s Energy and Industry Minister Khalid Al-Falih said at the World Energy Congress in Istanbul.
If prices reach $60 and stay there, U.S. shale drillers could find it commercially viable to revive production at some mothballed wells and boost output by more than 1 million barrels a day by early 2018, according to Vienna-based consultant JBC Energy GmbH.
“We may well see, in a short period of time, strong production growth coming from North America and elsewhere,” IEA Executive Director Fatih Birol said Tuesday in a Bloomberg TV interview with Manus Cranny and Anna Edwards. “Prices around $60 would be sufficient.” […]
Rig Count
Some U.S. producers have already stepped up operations. The number of active oil-drilling rigs in the U.S. has climbed from 328 in early May to 428 last week, according to Baker Hughes Inc.
Bjarne Schieldrop, chief commodities analyst at SEB AB bank in Oslo, said he expects the number of active U.S. rigs to rise by about 10 per week until OPEC holds its next formal meeting on Nov. 30.