The EIA forecasts a significant crude oil inventory draw in the coming weeks and hints shale oil revival

 

US oil production

The EIA, the US Energy Information Administration, forecasts a significant crude oil inventory draw in the coming weeks in response to the strong demand of the commodity.

According to its latest projections, the supply of crude oil will remain constrained in the short term due to the recent OPEC+ decision to stick to the existing production level and the voluntary addition production cut of 1 million bpd announced by Saudi Arabia for the months, starting from February to April.

Despite recent steep rise in price, the EIA still maintain that the price will remain around $67 a barrel. It expects that the OPEC+ will increase the production of crude oil for May as the demand start growing due to heightened economic activities thanks to the relative success of the global vaccination programmes.

In order to meet the rising demand, the EIA, expects that the US shale oil producers will be back in action in light of rising oil price; the scenario may have prompted the OPEC+ to increase the production for May.

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