(Repeats with no changes. John Kemp is a Reuters market analyst. The views expressed are his own)

* Chartbook: http://tmsnrt.rs/2EpmSoV

By John Kemp

LONDON, Feb 7 (Reuters) - U.S. crude oil production is set to increase by more than 1.2 million barrels per day in 2018 compared with 2017, according to the latest short-term forecasts from the U.S. Energy Information Administration.

U.S. crude production will average almost 10.6 million barrels per day (bpd) this year compared with 9.3 million bpd in 2017 ("Short-Term Energy Outlook", EIA, Feb. 6).

The forecast has been revised sharply higher from less than 10.3 million bpd at the time of the last prediction in January 2018 and 9.9 million bpd in July 2017 (http://tmsnrt.rs/2EpmSoV).

Unexpectedly rapid growth in U.S. onshore production from the Lower 48 states in recent months has caused the agency to re-benchmark its output numbers going forward.

Crude production from the Lower 48 excluding federal waters in the Gulf of Mexico, mostly from shale, is expected to rise by nearly 1.25 million bpd this year.

Total U.S. liquids production, which includes natural gas liquids, is predicted to rise by 1.7 million bpd in 2018, which is exactly the same as the forecast increase in global liquids consumption.

If the forecasts prove correct, U.S. shale producers will capture all or most of the predicted growth in global oil consumption this year.

OPEC QUANDARY

Surging output from shale underscores the growing competitive threat to members of the Organization of the Petroleum Exporting Countries and its allies led by Russia.

Efforts to restrain production under the cooperation framework between OPEC and non-OPEC allies risk back-firing.

The cooperating countries are already conceding market share to the shale producers, in a re-run of the situation before oil prices slumped in 2014.

If production restraint succeeds in drawing down global inventories even further, and pushes Brent significantly above $70 per barrel, the resulting shale surge and slowdown in consumption growth will intensify the danger.

The dilemma between defending prices or protecting market share has been a familiar one for OPEC for the last 40 years, and the organisation has regularly alternated between pursuing these competing priorities.

Saudi-led OPEC focused on defending prices before 2014, then switched to protecting market share between June 2014 and June 2016, before reverting to price defence from December 2016 onwards.

The price defence strategy has worked but is now starting to threaten the organisation's market share and could become counterproductive if carried too far.