S&P Global | Claudia Carpenter | February 20, 2019

US oil production will keep expanding through at least 2020, led by further growth from the Permian and New Mexico and putting a cap on Brent crude prices, according to S&P Global Ratings.

Output from the US will exceed 13 million b/d in 2020 compared with about 12 million b/d this year, Andrey Nikolaev, senior director, analytical manager in S&P Global Ratings, said Wednesday in a presentation given in Dubai.

Already the world’s biggest oil producer after pulling ahead of Saudi Arabia last year, US shale output is widely expected to continue growing strongly this year, after surging by some 1.8 million b/d in 2018.

He sees benchmark Brent crude averaging $55/b in 2019, 2020 and 2021. Front-month ICE Brent futures were trading at over $65/b Wednesday.

He also noted US Energy Information Administration forecasts for further increases in world inventories in 2019 and 2020, even with strong demand.

Nikolaev also sees output by the large international oil companies continuing to rise. Combined global production by the “supermajors” — ExxonMobil, Chevron, Shell, BP, Total, Eni and Equinor — will reach about 23 million b/d of oil equivalent by 2021, recording growth every year since 2014, according to the presentation.