The International Energy Agency (EIA) said on Thursday that it expects U.S. shale production to surge this year thanks to technology gains.

The IEA now expects U.S. light tight oil production to post “an even larger increase” of 170,0000 barrels per day in 2017, up from a 300,000 bpd decline in 2016.

The IEA said that U.S. shale producers have become “much leaner and fitter” since last year thanks to technological gains that have shortened drill times and increased well productivity.

U.S. shale production has continued to rise as OPEC and some non-OPEC producers look to curb production.

The IEA said its still “far too soon” to know the level of compliance the production deals will achieve.

OPEC members agreed late last year to cut the group’s overall production down by 1.2 million bpd to 32.5 million bpd.

Libya and Nigeria are exempt from participating in OPEC’s production cut plans.

A group of non-OPEC members, including Russia, have also agreed to trim their overall production by 558,000 bpd.

Both production cut plans were effective at the start of the year and will be in place for an initial six month period.

OPEC Secretary General Mohammad Sanusi Barkindo told the Associated Press earlier this month this month that there has been a “high level of compliance” with the production plans.

According to data collected by S&P Global Platts, total OPEC production declined to 32.85 million bpd in December in December thanks to falling production in Nigeria and Saudi Arabia.

Saudi Arabia’s oil minister Khalid al-Falih told Reuters earlier this week that OPEC and non-OPEC members are not likley to extend their production deals past the initial six month period.

Al-Falih added that he expected the oil market to re-balance in the first half of 2017.

The IEA said that al-Falih’s comments signal that, if global crude inventories report draws of 700,000 bpd “implied” by OPEC’s production target and non-OPEC support, the oil market and prices are likely to stabilize.

However, the agency added that the stabilization would not be at a “sufficiently high level to allow another bonanza for high cost producers.”

The IEA revised its global oil demand growth forecast up to 1.5 million barrels per day thanks to stronger European demand for LPG and diesel.

“Europe has seen two years of year-on-year growth following nine straight years of flat or declining demand,” the IEA said.

The agency added that it still expects the global demand growth rate to fall back to 1.3 million bpd this year.

While that level is still above the average 1.2 million bpd rate seen this century, the agency said the prospects of higher product prices and a stronger U.S. dollar could reduce demand growth.

The IEA expects combined production in China and Colombia to grow by 415,000 bpd this year.

The agency expects total non-OPEC net production to increased by 380,000 bpd after taking planned output cuts from eleven non-OPEC countries into account.

The IEA added that the non-OPEC boost could by “supplemented” by higher production from Libya and Nigeria.



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