U.S. shale producers are churning out crude oil at such a relentless pace that the country will soon become the most influential player in the energy market, according to an analyst.
"Few can dispute that 2017 belonged to OPEC after it successfully reasserted its pricing influence over the oil market," Stephen Brennock, oil analyst at PVM Oil Associates, said in a research note Wednesday.
"This year, however, its production curbs will increasingly have to make do with playing second fiddle to a Texas-sized wave of U.S. shale growth," he added.
Oil prices have skyrocketed around 40 percent since the middle of 2017, with Brent crude rising to multi-year highs above $71 a barrel, before a pullback last week wiped out its gains for 2018.
The main price driver has been an OPEC-led supply cut from major oil-producing group OPEC, which started to withhold output in January last year. The production cuts agreed by Saudi Arabia, Russia and 10 other allied producers are aimed at clearing a supply overhang and propping up prices. The deal is scheduled to last throughout 2018.
However, rising U.S. crude exports and a stronger-than-anticipated price rally in recent months have threatened to loosen Russia and Saudi Arabia's grip on key overseas markets.
In a closely-watched monthly report published by the International Energy Agency (IEA) on Tuesday, the Paris-based organization said a rise in global oil production — led by the U.S. — was on track to outpace growth in demand this year.
"Even though oil stocks are fore¬cast to draw this year, non-OPEC growth supply will still exceed the growth in global oil demand. This is hardly a supportive environment and is not conducive to a sustained price recovery," Brennock said.
The IEA also forecast that the U.S. would be well-placed to overtake the likes of Saudi Arabia and Russia as the world's leading energy producer by 2019.
Recent U.S. government data showed that American drillers began pumping more than 10 million barrels of crude oil daily in November, more than top OPEC producer Saudi Arabia.