EIA: Harsh winter affected US heating expenditures, oil production

Worldwide liquids fuels consumption will increased by 1.2 million b/d this year and by 1.4 million b/d in 2015, according to the latest outlook from the US Energy Information Administration. In last month’s Short-Term Energy Outlook (STEO), EIA projected that global oil demand would climb by 1.3 million b/d in 2014 and 1.4 million b/d in 2015.

The outlook for this year sees countries outside of the Organization for Economic Cooperation and Development (OECD) accounting for all consumption growth in 2014 and nearly all of the growth in 2015. EIA expects lower OECD consumption in 2014, led by projected consumption declines in both Japan and Europe.

“China is expected to see the biggest jump in petroleum demand this year, with consumption increasing by 400,000 b/d. Japan and Europe are forecast to lead the decline in oil demand this year among industrialized countries as a group, with consumption falling by 150,000 b/d and 60,000 b/d, respectively,” EIA said.

Projected OPEC crude oil production will fall by about 500,000 b/d and 300,000 b/d in 2014 and 2015, respectively, as some OPEC countries, led by Saudi Arabia, reduce production to accommodate the non-OPEC supply growth.

“Unplanned crude oil supply disruptions among OPEC producers averaged more than 2.3 million b/d in February 2014, almost 100,000 b/d higher than the previous month. Libya continues to experience swings in its production, contributing to changes in the OPEC disruption estimate,” EIA said.

Non-OPEC production is forecast to increase by 1.8 million b/d this year and by 1.5 million b/d in 2015. The area with the most growth will be the US and Canada, where the combined production will climb by 1.3 million b/d this year and by 1.2 million b/d next year.

US oil market

During the beginning of October 2013 to the end of February 2014, US average heating degree days were 13% higher than last winter and 10% above the 10-year average, affecting mostly households in the Midwest that primarily use propane and those in the Northeast that rely on heating oil.

EIA’s current estimates for winter heating expenditures for homes heating with propane in the Midwest is $2,212, which is $759 higher than projected in October. The current estimate for average US expenditures for homes using heating oil is $2,243, $197 higher than projected in October STEO.

EIA expects US liquid fuels consumption to remain flat in 2014. Distillate fuel consumption rises 10,000 b/d, up 0.3% from 2013, the report said. In 2015, total liquid fuels consumption increases 100,000 b/d, driven primarily by increasing transportation demand for distillate fuel oil and industrial demand for hydrocarbon gas liquids.

On the supply side, EIA’s initial estimates for December 2013 and January 2014 US crude oil production have also been revised downward due to harsh winter conditions over the past few months.

“Bad weather conditions cut into US crude oil production this winter, but much of the production slowdown will be made up over the next few months by accelerated well completions. Crude oil production in the Bakken formation in North Dakota and Montana fell in December, but is expected to rebound to 1 million b/d this month,” EIA said.

EIA expects strong crude oil production growth, primarily concentrated in the Bakken, Eagle Ford, and Permian regions, continuing through 2015. Forecast production increases from an estimated 7.5 million b/d in 2013 to 8.4 million b/d in 2014 and 9.2 million b/d in 2015.

Crude oil, product prices

EIA expects strong US crude oil production growth will help reduce WTI prices to an average of $95/bbl this year.

“The startup of the new Cushing Marketlink pipeline to the Gulf Coast as well as strong refinery runs in the Midwest helped reduce oil inventories at the Cushing, Okla., storage hub to their lowest levels in 2 years,” EIA said.

Led by falling crude oil prices, the projected US annual average regular gasoline retail price, which fell from $3.63/gal in 2012 to an average of $3.51/gal in 2013, will continue to fall to $3.45/gal in 2014 and $3.37/gal in 2015. Diesel fuel prices, which averaged $3.92/gal in 2013, are projected to average $3.85/gal in 2014 and $3.78/gal in 2015.

Refining, natural gas

Over the next 2 years, US refining capacity and crude oil inputs to refineries are expected to increase as companies expand and build capacity to process the light crude oil from rising US production. Crude oil inputs to refineries should exceed the previous high in 2004 and reach 15.6 million b/d by 2015, according to EIA.

US natural gas inventories will end the heating season below 1 tcf for the first time since 2003 because of large withdrawals of gas this winter to meet high heating demand. EIA expects growing gas production and moderate demand from the electric power sector will allow for a record build in gas stocks during the April-September injection season.

EIA expects total gas consumption will average 71.3 bcfd in 2014, a drop of 0.1 bcfd from 2013, due to higher gas prices and declines in gas used for power generation. Gas-marketed production will increase an average 2.5% in 2014 and 1.1% in 2015, according to the outlook. Projected Henry Hub gas prices average $4.44/MMbtu in 2014 and $4.14/MMbtu in 2015, EIA said.

Related Articles

EPA approves Magellan’s Corpus Christi splitter project

12/12/2014 The US Environmental Protection Agency has issued a final greenhouse gas prevention of significant deterioration construction permit to Magellan Pr...

Keyera to take majority interest in Alberta gas plant

12/12/2014 Keyera Corp., Calgary, will pay $65 million (Can.) to buy a 70.79% ownership interest in the Ricinus deep-cut gas plant in west-central Alberta.

PBF Energy, PBF Logistics make management changes

12/12/2014 Matthew Lucey, currently executive vice-president of PBF Energy Inc., will succeed Michael Gayda as the company’s president. Todd O’Malley, current...

TAEP: TPI still peaking, but ‘contraction unavoidable’ as oil prices fall

12/12/2014 The Texas Petro Index (TPI), a composite index based on a comprehensive group of upstream economic indicators released by the Texas Alliance of Ene...

MARKET WATCH: NYMEX crude oil price extends slump

12/12/2014 Crude oil prices extended their slump on the New York market with a Dec. 11 settlement of less than $60/bbl for January, and prices continued downw...

US needs more data before ending crude export ban, House panel told

12/11/2014 Much more environmental impact information is needed before the US can reasonably remove crude oil export limits, a witness told a House Energy and...

BOEM raises offshore oil spill liability limit to $134 million

12/11/2014 The US Bureau of Ocean Energy Management increased the liability limit for oil-spill related damages from offshore operations to $134 million from ...

Rosneft, Essar sign terms of oil supply agreement

12/11/2014 OAO Rosneft and Essar Energy PLC have signed key terms of an oil supply agreement in New Delhi. Rosneft said shipments to India may begin in 2015.

Barton introduces bill to remove US crude export limits

12/11/2014

US Rep. Joe Barton (R-Tex.) introduced legislation that would remove US crude oil export limits that have been in place for nearly 40 years.

White Papers

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...

6 ways for Energy, Chemical and Oil and Gas Companies to Avert the Impending Workforce Crisis

As many as half of the skilled workers in energy, chemical and oil & gas industries are quickly he...
Sponsored by

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Available Webcasts



The Future of US Refining

When Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST


Oil & Gas Journal’s Forecast & Review/Worldwide Pipeline Construction 2015

When Fri, Jan 30, 2015

The  Forecast & Review/Worldwide Pipeline Construction 2015 Webcast will address Oil & Gas Journal’s outlooks for the oil market and pipeline construction in a year of turbulence. Based on two annual special reports, the webcast will be presented by OGJ Editor Bob Tippee and OGJ Managing Editor-Technology Chris Smith.
The Forecast & Review portion of the webcast will identify forces underlying the collapse in crude oil prices and assess prospects for changes essential to recovery—all in the context of geopolitical pressures buffeting the market.

register:WEBCAST



On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


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