OPEC sees crude glut easing in second half of 2016

An OPEC branded flag sits on a table ahead of the 169th Organization of Petroleum Exporting Countries (OPEC) meeting in Vienna, Austria, on Thursday, June 2, 2016. Saudi Arabia is ready to consider a surprise deal with fellow OPEC members, attempting to mend divisions that had grown so wide many dubbed the group as good as dead. Photographer: Akos Stiller/Bloomberg
(Akos Stiller/Bloomberg)

HOUSTON – The Organization of Petroleum Exporting Countries believes U.S. oil production is set to drop by 150,000 barrels a day in the second half of 2016, one of the main factors behind a long-anticipated easing of the global oil glut over the next few months.

That drop in the nation’s output will come, OPEC said in its monthly oil market report, from the shale plays at the center of the U.S. energy boom a few years ago. Declines in those regions, including in South Texas, will overwhelm rising output from the Gulf of Mexico. A recent decrease in the price of U.S. oil stocks shows the market is realigning supplies with demand, the cartel said.

Click through this gallery to see how the shale oil boom in the U.S. helped produce the global oil glut.

“Provided that there is a clearer picture regarding oil supply and demand, the expected improvement in global economic conditions should result in a more balanced oil market toward the end of the year,” OPEC said.

The group says demand for its oil will amount to 32.6 million barrels a day this year. In May, OPEC’s output fell by 100,000 barrels a day, the group said, citing independent sources.

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