(EnergyAsia, May 20 2015, Wednesday) — The global oil glut is about to worsen, according to the US Energy Information Administration (EIA) which has raised its forecast for global oil supply over the next two years to widen the gap over demand.


In its May report, the agency said it expects the world to produce a record 94.83 million b/d of liquid fuels in 2016 and 94.60 million b/d this year, representing a significant raise from the April report’s forecast of 94.26 million b/d and 94.16 million for the two respective years.

As if confirming Saudi Arabia’s boast that it is winning the war for market share, the EIA expects OPEC to account for the bulk of global production increases over the next two years at the expense of competitors in North America.

OPEC is seen producing 37.04 million b/d in 2015 and 36.92 million b/d next year compared with last month’s forecast for 36.77 million b/d and 36.45 million b/d. US production, the source of most non-OPEC supply growth in recent years, has been revised down to 14.73 million b/d and 15.05 million b/d over the two years compared with 14.78 million b/d and 15.17 million b/d previously.

The EIA expects Iraq to be the largest contributor to OPEC production growth over the next two years, although much will depend on the outcome of the conflict between Iraqi forces and the Islamic State army which is advancing towards Baghdad.

Iran too will be boosting production as the global powers are looking more likely to lift long-standing trade sanctions against the regime for conducting its nuclear energy programme.

On April 2, Iran and the five permanent members of the UN Security Council and Germany (P5+1) agreed to guide negotiations towards a comprehensive agreement by June 30.

“A comprehensive agreement could result in the lifting of oil-related sanctions against Iran and a subsequent increase in Irans crude oil production and exports, although the potential timing and details of any suspension of sanctions are uncertain,” said the EIA.

The EIA expects the combined boost of additional production from Iraq and Iran will more than offset losses in Libya, Angola, Algeria, and Kuwait.

On the demand side, global consumption will grow strongly over the next two years, by 1.34% this year and 1.39% in 2016. The EIA raised its forecast for next year’s global demand to 94.58 million b/d from last month’s 94.2 million b/d, and for 2015’s demand to 93.28 million b/d compared with 93.09 million b/d previously.

Most of the growth will take place in Asia, Africa and the Middle East.

Despite the call for rising global glut, the EIA raised its forecast for crude prices, with Brent to average US$61 a barrel this year and US$70 next year, compared with last month’s forecasts of US$60 and US$65 for the two respective years.

 

May 2015: EIA’s world liquids demand forecast, in million b/d

2014    2015 * y/y %   2016 * y/y %

  1. America 23.43 23.74   1.32     23.81   0.29

China                          10.67   11.00   3.09     11.34   3.09

Others                                    57.95   58.54   1.02     59.43   1.52

TOTAL                         92.05   93.28   1.34     94.58   1.39

*forecast

 

92.05 93.28 94.58

Apr 2015: EIA’s world liquids demand forecast, in million b/d

2014    2015 * y/y %   2016 * y/y %

  1. America 23.43 23.73   1.28     23.80   0.29

China                          10.67   11.00   3.09     11.34   3.09

Others                                    57.95   58.36   0.71     59.06   1.20

TOTAL                         92.05   93.09   1.13     94.20   1.19

*forecast

 

Mar 2015: EIA’s world liquids demand forecast, in million b/d

2014    2015 * y/y %   2016 * y/y %

  1. America 23.43 23.71   1.20     23.76   0.21

China                          10.67   11.00   3.09     11.34   3.09

Others                                    58.03   58.42   0.67     59.07   1.11

TOTAL                         92.16   93.13   1.05     94.17   1.08

*forecast

 

Feb 2015: EIA’s world liquids demand forecast, in million b/d

2014    2015 * y/y %   2016 * y/y %

  1. America 23.42 23.68   1.11     23.76   0.34

China                          10.67   11.00   3.09     11.34   3.09

Others                                    58.04   58.46   0.72     59.05   1.00

TOTAL                         92.13   93.14   1.10     94.15   1.08

*forecast

 

Jan 2015: EIA’s world liquids demand forecast, in million b/d

2014    2015 * y/y %   2016 * y/y %

  1. America 23.45 23.67   0.94     23.76   0.38

China                          10.98   11.30   2.91     11.65   3.10

Others                                    56.96   57.42   0.81     57.47   0.09

TOTAL                         91.39   92.39   1.09     93.42   1.11

*forecast

 

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

2013    2014 * y/y %   2015 * y/y %

  1. America 23.44 23.39   -0.21    23.51   0.51

China                          10.61   10.98   3.49     11.34   3.28

Others                                    56.43   57.07   1.13     57.47   0.70

TOTAL                         90.48   91.44   1.06     92.32   0.96

*forecast

 

 

May 2015: EIA’s world liquids supply forecast, in million b/d

2014    2015 * y/y %   2016 * y/y %

OPEC                           36.37   37.04   1.84     36.92   -0.32

Non-OPEC                   56.73   57.56   1.46     57.91   0.61

– US                                              13.98     14.73     5.36        15.05     2.17

TOTAL                         93.10   94.60   1.61     94.83   0.24

*forecast

Apr 2015: EIA’s world liquids supply forecast, in million b/d

2014    2015 * y/y %   2016 * y/y %

OPEC                           36.43   36.77   0.93     36.45   -0.87

Non-OPEC                   56.66   57.39   1.29     57.81   0.73

– US                                              14.00     14.78     5.57        15.17     2.64

TOTAL                         93.09   94.16   1.15     94.26   0.11

*forecast

Mar 2015: EIA’s world liquids supply forecast, in million b/d

2014    2015 * y/y %   2016 * y/y %

OPEC                           36.46   36.52   0.16     36.23   -0.79

Non-OPEC                   56.55   57.58   1.82     58.17   1.02

– US                                              13.98     14.92     6.72        15.34     2.82

TOTAL                         93.01   94.10   1.17     94.40   0.32

*forecast

Feb 2015: EIA’s world liquids supply forecast, in million b/d

2014    2015 * y/y %   2016 * y/y %

OPEC                           36.49   36.49   0.00     36.18   0.85

Non-OPEC                   56.45   57.27   1.45     58.05   1.36

– US                                              13.94     14.83     6.38        15.35     3.51

TOTAL                         92.94   93.76   0.88     94.23   0.50

*forecast

Jan 2015: EIA’s world liquids supply forecast, in million b/d

2014    2015 * y/y %   2016 * y/y %

OPEC                           36.00   36.13   0.36     36.14   0.03

Non-OPEC                   56.18   56.84   1.17     57.37   0.93

– US                                              13.98     14.83     6.08        15.37     3.65

TOTAL                         92.18   92.97   0.86     93.51   0.58

*forecast

 

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

2013    2014 * y/y %   2015 * y/y %

OPEC                           36.03   35.96   -0.19    35.92   -0.11

Non-OPEC                   54.13   56.00   3.45     56.84   1.50

– US                                              12.34     13.90     12.64     14.89     7.12

TOTAL                         90.16   91.96   2.00     92.75   0.86

*forecast