(EnergyAsia, November 28 2014, Friday) — The US Energy Information Administration (EIA) expects oil prices to remain under selling pressure after slashing its latest forecast for 2015 global demand while raising the supply outlook.

In its November report, the agency said it expects Brent crude oil spot prices to average US$83 per barrel in 2015, sharply down from its October forecast of US$101.

“There is significant uncertainty over the crude oil price forecast because of the range of potential supply responses from the Organization of the Petroleum Exporting Countries (OPEC), particularly Saudi Arabia, and US tight oil producers to the new lower oil price environment,” it said.

The EIA said it expects the world to consume 92.5million b/d, down from its previous month’s call for 92.71 million b/d. On the supply side, it expects world production to reach 92.91 million b/d, up from the October forecast of 92.67 million b/d.

As a result of this growing supply-demand imbalance, the EIA said the world’s oil stock build will reach 400,000 b/d in the fourth quarter of 2014 through 2015. It attributed the forecast for higher world oil production mostly to an upward revision of expected supply from Saudi Arabia.

The agency described Saudi Arabia’s role in the oil market as being “highly uncertain” as Riyadh has stated it would rather defend its export market share than cut production to keep prices higher.

“In the past, Saudi Arabia often played the role of the swing producer, cutting its production to accommodate supply growth elsewhere or increasing its output to make up for a supply shortfall,” said the EIA. While Saudi Arabia will continue to play “some role” as swing producer, it has also become more concerned with protecting its market share.

The agency expects Saudi Arabia’s production to remain above nine million b/d in 2015 but below its current level of 9.5 million b/d that will enable it “to avoid further downward pressure on oil prices amid high non-OPEC supply growth.”

The US has become a huge disruptive influence on global oil markets as it continues to ramp up production.

The EIA expects the US oil production to rise to 9.4 million next year, making it the highest since 1972.

 

Nov 2014: EIA’s world liquids demand forecast, in million b/d

2013    2014 * y/y %   2015 * y/y %

  1. America 23.44 23.34   -0.43    23.48   0.60

China                          10.61   10.98   3.49     11.34   3.28

Others                                    56.43   57.06   1.11     57.68   1.09

TOTAL                         90.48   91.38   0.99     92.50   1.23

*forecast

 

Oct 2014: EIA’s world liquids demand forecast, in million b/d

2013    2014 * y/y %   2015 * y/y %

  1. America 23.40 23.36   -0.17    23.56   0.86

China                          10.61   10.98   3.49     11.35   3.37

Others                                    56.44   57.13   1.22     57.80   1.17

TOTAL                         90.45   91.47   1.13     92.71   1.36

*forecast

Sept 2014: EIA’s world liquids demand forecast, in million b/d

2013    2014 * y/y %   2015 * y/y %

  1. America 23.38 23.35   -0.13    23.54   0.81

China                          10.61   10.98   3.49     11.41   3.92

Others                                    56.52   57.22   1.24     58.03   1.42

TOTAL                         90.51   91.55   1.15     92.98   1.56

*forecast

 

 

Nov 2014: EIA’s world liquids supply forecast, in million b/d

2013    2014 * y/y %   2015 * y/y %

OPEC                           36.03   35.92   -0.31    35.93   0.02

Non-OPEC                   54.16   56.03   3.45     56.98   1.70

– US                                              12.36     13.86     12.14     14.95     7.86

TOTAL                         90.18   91.95   1.96     92.91   1.04

*forecast

 

Oct 2014: EIA’s world liquids supply forecast, in million b/d

2013    2014 * y/y %   2015 * y/y %

OPEC                           36.03   35.78   -0.69    35.51   -0.75

Non-OPEC                   54.12   55.98   3.44     57.15   2.09

– US                                              12.34     13.82     11.99     15.05     8.90

TOTAL                         90.15   91.76   1.79     92.67   0.99

*forecast

Sept 2014: EIA’s world liquids supply forecast, in million b/d

2013    2014 * y/y %   2015 * y/y %

OPEC                           36.02   35.77   -0.69    35.86   0.25

Non-OPEC                   54.08   55.91   3.39     57.16   2.24

– US                                              12.35     13.78     11.58     14.99     8.78

TOTAL                         90.10   91.68   1.75     93.02   1.46

*forecast

 

 

Nov 2014

Short-Term Energy Outlook (STEO)