Opec is predicting the US shale boom will ramp up in 2018

The Organisation of the Petroleum Exporting Countries (Opec) has increased its forecast for oil supply from countries outside the cartel in 2018, stoking fears the US will take advantage of higher prices to ramp up shale production and send prices back down from 2014 highs.

Opec said non-member countries would increase supply by 1.15m barrels per day (bpd), revising its its previous estimate up by 160,000 bpd.

“Higher oil prices are bringing more supply to the market, particularly in North America and specifically tight oil,” Opec said in its monthly report. Tight oil is another term for shale.

Opec and several non-Opec producers like Russia have a pact to reduce production by 1.8m bpd until the end of 2018 to cut down the global supply glut. There are fears however that their work could be undone by the US taking advantage of higher oil prices and ramping up shale production.

The price of Brent crude oil recently climbed to $70 a barrel, a high not seen since the 2014 slump.

Opec’s report also showed a sharp downturn in Venezuelan oil production amid an economic crisis. Output there fell by about 216,000 bpd to 1.6m bpd in December.