In its latest Short-Term Energy Outlook, issued Jan. 8, the US Energy Information Administration forecasts a fairly loose oil market in the next 2 years, as higher global consumption will be more than offset by increasing global supply. Also, this STEO is the first to include monthly forecasts for 2014, EIA reported.
Worldwide oil supply is expected to increase by 1 million b/d in 2013 and by 1.7 million b/d in 2014 with most of the growth coming from producers outside the Organization of Petroleum Exporting Countries, EIA reported. EIA also forecasts that non-OPEC production will rise by 1.4 million b/d in 2013 and by 1.3 million b/d in 2014. With continued increased production from US tight oil formations and Canadian oil sands, EIA sees North America accounting for two thirds of the projected growth in non-OPEC supply.
A decrease of 600,000 b/d in OPEC crude supply is expected in 2013, with the production reduction from Saudi Arabia. However, OPEC crude production will remain at least 30 million b/d over the next 2 years with increased production from some OPEC members, including Iraq, Nigeria, and Angola.
The growth of world liquid fuels consumption will remain flat in 2013 by an estimated 900,000 b/d. Due to a moderate recovery in global economic growth, worldwide liquid fuels consumption will pick up again in 2014 to an annual average of 1.3 million b/d. Most of the increase in the world’s oil consumption will come from countries outside the Organization for Economic Cooperation and Development over the forecast period.
EIA projects OECD consumption to further decline by 300,000 b/d in 2013, as modest consumption increases in North America are more than offset by decreasing consumption in Europe. A higher economic growth and flattened European consumption in 2014 will narrow the OECD consumption decline to 100,000 b/d.
US crude oil, liquid fuels
Total US liquid fuels consumption is forecast to increase by 70,000 b/d in 2013 and by 60,000 b/d in 2014 after consecutive years of decline. Distillate fuel oil and liquefied petroleum gas contribute to most of the consumption growth with continued growth in industrial use and the assumption of near-normal winter weather. Forecast motor gasoline and jet fuel consumption in 2013 and 2014 remains flat from 2012.
EIA expects US total crude oil production to raise from an average 6.4 million b/d in 2012 to 7.3 million b/d in 2013. Projected crude oil production continues to increase to 7.9 million b/d in 2014. Estimated Gulf of Mexico production increases to an average 1.37 million b/d in 2013 and continues to increase to an average 1.44 million b/d in 2014.
Because of continued substantial increases in US crude oil production, EIA expects US liquid fuel net imports to continue declining to an average of 6 million b/d by 2014 from 7.5 million b/d in 2012. The share of total US consumption met by liquid fuel net imports will also fall to 32% in 2014 from an average of 40% in 2012.
US natural gas
EIA expects US natural gas consumption will average 69.7 bcfd in 2013 and 69.4 bcfd in 2014, which is virtually unchanged from 2012. EIA also sees continued growth in US gas production, which is driven largely by onshore shale production. Production in the Marcellus shale areas of Pennsylvania and West Virginia will contribute to the growth with drilled wells becoming operational.
Working inventories of gas in the US reached a record-high in early November 2012 at an estimated 3.5 tcf. The spot price for gas at Henry Hub is expected to average $3.74/MMbtu in 2013 and $3.90/MMbtu in 2014.
Contact Conglin Xu at firstname.lastname@example.org.