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A well pump works at sunset on a farm near Sweetwater, Texas. Photo: LM Otero / AP

The commentary atop the International Energy Agency's monthly oil report published Thursday is headlined "Happy New Year?" — and the question mark there matters because IEA says it might not be joyous for OPEC. That's because rising U.S. shale production is blunting efforts by the cartel and Russia to tighten the market by extending their production-limiting through the end of 2018, a decision made last month in Vienna.

Why it matters: It's another sign of how the shale surge has re-shaped global crude markets and created big challenges for petro-states including Saudi Arabia and Russia.

Notes from the report:

  • "2018 may not necessarily be a happy New Year for those who would like to see a tighter market," IEA notes.
  • The IEA says there could be a global crude surplus of 200,000 barrels per day in the first half of the year.

By the numbers: The IEA has raised its forecast for U.S. crude oil production growth to 390,000 barrels per day this year and sees it surging by another 870,000 barrels per day in 2018. Overall, they're now forecasting production growth of 1.6 million barrels per day in 2018 from non-OPEC producers worldwide — that's 200,000 barrels higher than their previous monthly report.

But their forecast for oil demand growth remains at 1.3 million barrels per day next year. They see the surplus in the first half of the year eventually giving way to a deficit of similar size in the second half, "leaving 2018 as a whole showing a closely balanced market," IEA said.

Bottom line: "A lot could change in the next few months but it looks as if the producers’ hopes for a happy New Year with de-stocking continuing into 2018 at the same 500 kb/d pace we have seen in 2017 may not be fulfilled," IEA said.

Yes, but: The report acknowledges that getting shale right is tricky business, and there's lots of discussion these days of a push for stronger returns rather than simply "headlong expansion."

  • "The flexibility and ingenuity of the shale sector raises challenges to forecasters," IEA said.

Go deeper

Tech scrambles to derail inauguration threats

Illustration: Sarah Grillo/Axios

Tech companies are sharing more information with law enforcement in a frantic effort to prevent violence around the inauguration, after the government was caught flat-footed by the Capitol siege.

Between the lines: Tech knows it will be held accountable for any further violence that turns out to have been planned online if it doesn't act to stop it.

Dave Lawler, author of World
4 hours ago - World

Uganda's election: Museveni declared winner, Wine claims fraud

Wine rejected the official results of the election. Photo: Sumy Sadruni/AFP via Getty

Yoweri Museveni was declared the winner of a sixth presidential term on Saturday, with official results giving him 59% to 35% for Bobi Wine, the singer-turned-opposition leader.

Why it matters: This announcement was predictable, as the election was neither free nor fair and Museveni had no intention of surrendering power after 35 years. But Wine — who posed a strong challenged to Museveni, particularly in urban areas, and was beaten and arrested during the campaign — has said he will present evidence of fraud. The big question is whether he will mobilize mass resistance in the streets.

Off the Rails

Episode 1: A premeditated lie lit the fire

Photo illustration: Sarah Grillo/Axios. Photo: Chip Somodevilla/Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. Axios takes you inside the collapse of a president with a special series.

Episode 1: Trump’s refusal to believe the election results was premeditated. He had heard about the “red mirage” — the likelihood that early vote counts would tip more Republican than the final tallies — and he decided to exploit it.

"Jared, you call the Murdochs! Jason, you call Sammon and Hemmer!”

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