Feb. 27 (UPI) -- Gains in oil production from the United States should establish a ceiling over crude oil prices on the global market, the head of Russia's Lukoil said Monday.
Russia is coordinating with members of the Organization of Petroleum Exporting Countries on a production arrangement aimed at pulling an over-supplied market for crude oil back to balance. After dropping below $30 per barrel in early 2016, oil prices since OPEC's agreement surfaced in November have been steady above $50 per barrel.
U.S. shale oil production gains helped saturate the markets and output from the Lower 48 states has proved more resilient than expected to crude oil prices that are still about half what they were three years ago. Speaking to Bloomberg News, Lukoil Vice President Gati al-Jebouri said that resiliency may be a limiting factor to crude oil prices.
A future gain in U.S. crude oil production "is going to maintain a lid on increases in [crude oil] prices," he said.
By his outlook, crude oil prices will hold steady for the medium term at between $55 per barrel and $65 per barrel. The price for Brent crude oil, the global benchmark, was gaining ground early Monday to trade at around $56.50 per barrel.
The U.S. Energy Information Administration reported total U.S. oil production for the week ending Feb. 17 at 9 million barrels per day, down slightly year-on-year. Exports, meanwhile, were reported a 1.2 million bpd, more than double the level from last year.
Most of the gains in production came from the Lower 48, though Alaska's output grew slightly to 518,000 bpd.
For total growth outside of OPEC, another 240,000 bpd is expected "due to a pick up in drilling activities and investment in the United States," the latest monthly market report read.