(EnergyAsia, August 25 2014, Monday) — For the third consecutive month, the US Energy Information Administration (EIA) has reduced its forecasts for global oil demand growth for 2014 and 2015.

In its August short-term outlook on the energy markets, the agency expects the world to consume 91.56 million b/d this year and 92.96 million b/d in 2015, down from its record-high June forecasts for 91.79 million and 93.12 million b/d for the two respective years.

The August forecasts call for global oil demand to grow by 1.24% in 2014 and 1.53% in 2015, down slightly from the July predictions of 1.25% and 1.59% for the two years, due mostly to weaker oil demand growth in China.

The agency expects China’s oil demand to reach 10.98 million b/d this year and 11.41 million b/d    in 2015, compared with its July predictions for 11.05 million b/d and 11.49 million b/d.

“China’s real GDP growth rate was 7.5% in the second quarter of 2014, compared with an annual real GDP growth rate exceeding 9% from 2009 through 2011,” the EIA said in explaining its reduced forecast for Chinese oil demand growth.

It kept unchanged its forecasts for reduced oil demand from Japan and Europe. Japan’s oil consumption is seen falling by 130,000 b/d in 2014 and by a further 160,000 b/d in 2015 as the country continues to increase the use of natural gas and coal to generate electricity while restarting some of its nuclear power plants.

The EIA expects Japan to increase the use of natural gas and coal consumption to generate electricity while it prepares to restart some nuclear power plants to in 2015.

After falling by 120,000 b/d in 2013, OECD Europe’s oil consumption is expected to decline by 120,000 b/d in 2014 and a further 30,000 b/d in 2015.

On the supply side, the EIA expects non-OPEC liquids production to grow by 1.74 million b/d to 55.84 million b/d in 2014 and by a further 1.09 million b/d in 2015, thanks largely to rising supplies out of the US and Canada.

US crude oil production averaged an estimated 8.5 million b/d in July, making this the highest monthly level of production since April 1987.

The EIA expects US crude oil production to rise from 7.5 million b/d in 2013 to 8.5 million b/d in 2014 and 9.3 million b/d in 2015. The 2015 forecast represents the highest annual average level of oil production since 1972.

OPEC production is seen falling from 36.12 million in 2013 to 35.84 million b/d this year before recovering to 36.07 million b/d in 2015.

Despite the sharp drop in oil prices over the past month, the EIA said it expects the global oil-supply balance to remain tight, with surplus capacity averaging 2.1 million b/d in 2014 and 2.7 million b/d in 2015.

“Global unplanned supply disruptions remain at an elevated level and averaged 3.2 million b/d in July, of which Libya accounted for more than one-third,” it said.
Most of Iraq’s northern fields excluding the Kurdistan area have been idled by conflict while the bulk of the country’s production in the southern provinces and their export volumes have remained intact.

The agency said unplanned supply disruptions among non-OPEC producers averaged 600,000 b/d in July, slightly higher than the estimated June level. South Sudan, Syria, and Yemen accounted for 79% of total non-OPEC supply disruptions.

Aug 2014: EIA’s world liquids supply forecast, in million b/d
2013     2014 *    y/y %    2015 *    y/y %
OPEC            36.12     35.84     -0.78    36.07    0.64
Non-OPEC        54.04     55.81     3.28    56.90    1.95
– US            12.32    13.67    10.96    14.74    7.83
TOTAL            90.17     91.65     1.64    92.98    1.45
* forecast

Aug 2014: EIA’s world liquids demand forecast, in million b/d
2013     2014 *    y/y %    2015 *    y/y %
N. America        23.31     23.31     0.00    23.43    0.51
China            10.61     10.98     3.49    11.41    3.92
Others            56.52    57.27    1.33    58.12    1.43
TOTAL            90.44     91.56     1.24    92.96    1.53
* forecast

July 2014: EIA’s world liquids demand forecast, in million b/d
2013     2014 *    y/y %    2015 *    y/y %
N. America        23.29     23.30     0.04    23.41    0.47
China            10.66     11.05     3.66    11.49    3.98
Others            56.54    57.27    1.29    58.18    1.59
TOTAL            90.49     91.62     1.25    93.08    1.59
* forecasts
June 2014: EIA’s world liquids demand forecast, in million b/d
2013     2014 *    y/y %    2015 *    y/y %
N. America        23.29     23.37     0.35    23.44    0.30
China            10.66     11.05     3.66    11.49    3.98
Others            56.53    57.37    1.49    58.19    1.43
TOTAL            90.48     91.79     1.45    93.12    1.45
* forecasts
* forecasts

EIA’s monthly forecasts
2014    2014/2013     2015    2015/2014
Aug            91.56     1.24%        92.96    1.53%
July            91.62     1.25%        93.08    1.59%
June            91.79     1.45%        93.12    1.45%
May            91.56    1.31%        92.80    1.35%
April            91.61    1.36%        92.97    1.48%
March            91.60    1.35%        92.97    1.5%
February        91.62    1.39%        92.99    1.5%
January        91.59    1.33%        92.96    1.5%

2013    2013/2012     2014    2014/2013
December 2013    90.28    1.25%        91.43    1.27%
November        90.25    1.21%        91.39    1.26%
October        90.26    1.09%        91.43    1.30%
September        90.06    1.25%        91.25    1.32%
August            89.99    1.23%        91.21    1.36%
July             90.05    0.99%        91.29    1.38%
June            90.03     0.98%        91.22    1.32%
May            89.93     1.00%        91.14    1.35%
April            90.00    1.08%        91.33    1.48%