Recent government and analysts' reports paint a dramatic picture of the stunning rise in U.S. oil production, which has continued to surprise on the upside. Total liquids output from tight-oil plays alone is already up over last year by 700,000 barrels per day through the first three quarters of 2013—well above consensus forecasts made a year ago.

The Department of Energy's new monthly Drilling Productivity Report details rapid production advances across all the major shale plays. The Bakken and Eagle Ford account for 500,000 barrels per day of the total incremental supply, it says.

U.S. crude oil production growth continues to exceed expectations, according to a new report by Kevin Norrish of Barclays Research. Updated forecasts for this year's growth, as made by four prominent experts—Barclays, OPEC, the International Energy Agency and the US Energy Information Administration—have doubled since their original forecasts for 2013 were made a year ago.

The rate of expansion of oil output in the US is almost unprecedented. The PIRA Energy Group recently noted that US producers have added 2.8 million more barrels per day since 2010. This is the most rapid incremental growth reported by any oil producing country in more than 20 years, since Saudi Arabia raised its output from September 1990 to October 1992, partly to offset Iraqi production losses seen after the first Gulf War.

“What is also remarkable is the lack of any significant downward

pressure on prices … during the Saudi surge of the early 1990s, Brent crude prices fell by almost a third. In contrast, since U.S. output started accelerating in 2010, oil prices have risen robustly … with Brent up 37% and WTI gaining 22%, and that at a time when the global economy has been performing poorly and global energy demand growth has in general been soft,” says Norrish in the Barclays report.

Were it not for the surge in U.S. tight-oil production this year, Brent crude oil prices might be about $40 per barrel higher than they are, he says. At the same time, Saudi Arabia is producing at close to its fastest pace in some time, at nearly 10 million barrels per day.

Despite the rise in output from these two leading producers, Norrish has calculated that oil prices won't decline significantly this year or in 2014.

Why not? Stronger-than-expected demand is one reason. Global demand may rise by 1.1 million barrels per day by year end, compared to lower projections made a year ago. Supply problems in non-OPEC nations also contribute to a tighter oil market, with about 100,000 barrels per day lower output than originally forecast. Finally, OPEC production is slightly below projections made a year ago.

OPEC's involuntary production losses may not be reversed soon, given political upheavals and production problems in Libya, Iraq, Iran and Nigeria. “The call on OPEC oil for 2014 currently looks likely to be only around a million barrels per day less than its existing output level of 30 million a day,” Norrish says.

—Leslie Haines

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