In its most recent Short-Term Energy Outlook (STEO), the US Energy Information Administration expects global oil consumption to rise by 1.2 million b/d in 2015 and by 1.3 million b/d in 2016, upward from last month’s STEO by an average of 200,000 b/d in both 2015 and 2016, as lower oil prices stimulate demand growth more than previously expected.
EIA estimates production outside the Organization of Petroleum Exporting Countries to rise by 800,000 b/d in 2015 and by 400,000 b/d in 2016, reflecting slower production growth in the US and Canada, as well as declining production in Europe and Eurasia.
OPEC crude oil production is expected to rise by 400,000 b/d in 2015 and fall by 200,000 b/d in 2016. Forecast OPEC crude oil production was revised upward from last month’s STEO by 300,000 b/d in 2015 and by 200,000 b/d in 2016, with Iraq being the largest contributor to OPEC production growth over the next 2 years.
Prices
North Sea Brent crude oil prices averaged $60/bbl in April, a $4/bbl increase from March and the highest monthly average of 2015.
“Despite increasing global inventories, several factors contributed to higher prices in April, including indications of higher global oil demand growth, expectations for declining US tight oil production in the coming months, and the growing risk of unplanned supply outages in the Middle East and North Africa,” EIA said.
EIA forecasts that Brent crude oil prices will average $61/bbl in 2015 and $70/bbl in 2016, $1/bbl higher and $5/bbl lower than in last month’s STEO, respectively. Average WTI prices in 2015 and 2016 are expected to be $6/bbl and $5/bbl below Brent, respectively.
US crude oil production
Total US crude oil production averaged an estimated 9.3 million b/d in March, but it is expected to decline from June through September before growth resumes. Projected total crude oil production averages 9.2 million b/d in both 2015 and 2016, 40,000 b/d and 100,000 b/d lower than in last month’s STEO, respectively.
“The reduction in the crude oil production forecast reflects a reduced WTI price forecast for 2016 in this STEO and a sustained drop in rig counts beyond what EIA had initially expected. Oil-directed rigs declined to the lowest level in almost 5 years as of early May,” EIA said.
