IEA: U.S. shale oil 'leaner and fitter'

The U.S. shale oil industry has emerged from the recent market contraction leaner and more efficient, the International Energy Agency said.

The IEA said in a report for January that gains in crude oil prices since late 2016 put a modest damper on expectations of oil demand growth for the year. Oil prices plummeted to historic lows early last year, but rebounded sharply since members of the Organization of Petroleum Exporting Countries coordinated a multilateral deal to trim production.

The price for Brent crude oil Thursday was around $54.25 per barrel, about double the price from one year ago. That's brought some companies working in expensive basins like U.S. shale off the bench and the IEA said it was revising its estimate for U.S oil production higher, after predicting a contraction late last year.

"Recent reports tell us that the productivity of shale activity has improved in leaps and bounds," the report read. "Whether it be shorter drilling times or larger amounts of oil produced per well, there is no doubt that U.S. shale industry has emerged from the $30 per barrel oil world we lived in a year ago much leaner and fitter."

After forecasting a slump in production this year, the U.S. Energy Information Administration said total U.S. oil production for 2017 should increase slightly to 9 million barrels per day and expand again by 3 percent the following year.

OPEC's production agreement is designed to limit supply-side pressures weighing on oil prices. Much of that pressure, however, came from gains in the United States during the peak of the shale era in the middle of the decade. That suggests a ceiling may be emerging for crude oil prices as U.S. and other producers counter OPEC's managed decline.

On that deal, the IEA said it was "far too soon" to declare widespread compliance even as many parties to the agreement declare their commitments.

Saudi Arabia's oil minister said earlier this week the deal might not last beyond a six-month time frame.