EIA: Production outages tightened global oil market in August

Unplanned liquid fuels production outages, peaking summer demand, and rising concerns over the conflict in Syria and its regional implications contributed to a tighter global oil market in August, according to the US Energy Information Administration’s most recent Short-Term Energy Outlook.

World production disruptions reached 2.7 million b/d during the month, the highest level since January 2011. Of the total volume, 2.1 million b/d was attributable to the Organization of the Petroleum Exporting Countries, recording the highest disruption level since January 2009 when EIA began tracking this information.

Global liquid fuels consumption is estimated to increase by 1.1 million b/d in 2013 and by another 1.2 million b/d in 2014, according to EIA. China, the Middle East, Central and South America, and other countries outside of the Organization for Economic Cooperation and Development account for “essentially all consumption growth,” EIA’s outlook said.

EIA forecasts non-OPEC liquid fuels production to increase by 1.6 million b/d in 2013 and by 1.4 million b/d in 2014, with the largest production growth from North America.

EIA expects that OPEC liquid fuels production will decline by 0.8 million b/d in 2013 and 0.2 million b/ d in 2014, reflecting unplanned production outages among some OPEC producers as well as decreases in Saudi Arabia’s production in accommodating the increase of non-OPEC supply.

The Brent crude oil annual average spot price declines from $112/bbl in 2012 to $108/bbl in 2013 and $102/bbl in 2014, reflecting the increasing supply of liquid fuels from non-OPEC countries. The forecast WTI crude oil spot price averages $99/bbl in 2013 and $96/bbl in 2014, $2/bbl and $3/bbl higher, respectively, than last month’s STEO.

US crude oil, liquid fuels

Total US liquid fuels consumption in 2013 is estimated to be 18.68 million b/d, up 0.7% from last year. As improving fuel efficiencies more than offset increases in highway travel and air freight, EIA projects lower gasoline consumption and flat jet fuel consumption. In 2014, total consumption of liquid fuels is projected to be 18.72 million b/d, up only 0.2%.

US crude oil production will average 7.5 million b/d this year, up from 6.5 million b/d last year. Projected US crude oil production is 8.4 million b/d in 2014. EIA expects liquid fuel net imports, including crude oil and petroleum products, to average 5.4 million b/d in 2014, down from 7.4 million b/d in 2012.

EIA increases the average regular gasoline retail price forecasts during the third and fourth quarters of 2013 to $3.60/gal and $3.44/gal, respectively, from $3.59/gal and $3.33/gal in last month’s outlook. EIA expects full-year regular gasoline retail prices, which averaged $3.63/gal in 2012, to average $3.55/gal in 2013 and $3.43/gal in 2014, due to falling crude oil prices.

US natural gas

Forecast average US gas demand in 2013 is 69.9 bcfd, up 0.2 bcfd from last year and flat from EIA’s previous monthly outlook. The amount of natural gas used for residential and commercial space heating is expected to increase due to colder winter temperatures in 2013 and 2014.

Projected natural gas consumption in the electric power sector declines to 22.1 bcfd in 2013 and 21.6 bcfd in 2014 from 25 bcfd in 2012, primarily driven by the projected year-over-year increases in natural gas prices.

While EIA expects natural gas production growth to continue in 2013 and 2014, the projected increases of 1.1% and 0.7% are far below 2011 and 2012 growth.

Natural gas working inventories ended August at an estimated 3.2 tcf, down 210 bcf from the same time last year. EIA projects inventories will total 3.8 tcf at the end of the injection season and 1.9 tcf at the end of the winter heating season.

EIA’s average 2013 Henry Hub natural gas spot price forecast is $3.68/MMbtu, compared with $3.71/MMbtu in last month’s outlook. EIA expects that Henry Hub spot prices will average $3.91/MMbtu in 2014.

Contact Conglin Xu at conglinx@ogjonline.com.

Related Articles

API to issue recommended practice to address pipeline safety

07/01/2015 The American Petroleum Institute expects to issue a new recommended practice in another few weeks that addresses pipeline safety issues, but the tr...

Shell Midstream Partners takes interest in Poseidon oil pipeline

07/01/2015 Shell Midstream Partners LP has completed its acquisition of 36% equity interest in Poseidon Oil Pipeline Co. LLC from Equilon Enterprises LLC, a s...

MARKET WATCH: Oil prices decline as US crude inventories post first gain in 9 weeks

07/01/2015 Oil prices on July 1 surrendered much of their gains from the day before after the release of a government report showing the first rise in US crud...

FWS issues Shell letter of authorization on Chukchi Sea lease

07/01/2015 The US Fish & Wildlife Service issued Shell Gulf of Mexico Inc. a letter of authorization (LOA) related to the potential disturbance of polar b...

USGS: Water usage for fracturing varies widely across shale plays

07/01/2015 The volume of water required to hydraulically fracture wells varies widely across the country, according to the first national analysis and map of ...

Case for Keystone XL has grown stronger, TransCanada tells Kerry

06/30/2015 Canada is taking strong steps toward combating climate change, and the proposed Keystone XL pipeline crude oil pipeline remains in the US national ...

Forum extends study of subsea integrity

06/30/2015

Work by an industry forum called SURF IM Network, which studies oil and gas subsea integrity management, has been extended by 3 years.

Survey begins of collaboration on the UKCS

06/30/2015

Deloitte has begun a survey about collaboration in the oil and gas producing industry of the UK Continental Shelf.

Lytle named to Canada’s National Energy Board

06/30/2015

Murray Lytle has been appointed as a full-time member of Canada’s National Energy Board for a term of 7 years, effective July 6.

White Papers

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by
Available Webcasts


OGJ's Midyear Forecast 2015

When Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

When Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.

register:WEBCAST



On Demand

Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected