THE USA is set to become the biggest oil producer in the world amid a boom in output in the country which is putting renewed pressure on crude prices, experts have said.

The International Energy Agency noted US oil production increased by a “colossal” 846,000 barrels daily in the three months to November putting the country on course to overtake Saudi Arabia soon.

“By the end of this year, it might also overtake Russia to become the global leader,” said the IEA, in its latest monthly Oil Market Report.

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The Paris-based agency noted that the growth in US production has been the main factor behind the partial recovery in the crude price since late 2016 running out of steam in recent weeks.

After rising above $70 per barrel for the first time since 2014 recently, Brent crude has fallen back to around $62/bbl.

The implications of the IEA’s analysis are sobering for the North Sea oil and gas industry, which is emerging from the deep downturn triggered by the sharp fall in oil prices from a peak of $115/bbl in 2014.

Led by executive director Fatih Birol, the IEA said the underlying oil market fundamentals in the early part of 2018 look less supportive for prices.

The growth in production in US shale areas is countering the impact of cuts in production agreed by major exporting nations led by Saudi Arabia in 2016 to support the market.

The IEA said US producers had cut costs dramatically since 2014 . They are now enjoying a wave of growth so extraordinary that in 2018 their increase in liquids production could equal global demand growth.