(EnergyAsia, January 18 2013, Friday) — After years of drawing on inventory, the world will produce more crude oil than it consumes next year, said the US Energy Information Administration (EIA).
In its January short-term energy outlook report, the agency said it expects world production to rise more than 3% over 2012’s 88.99 million b/d to reach 91.71 million b/d in 2014. With global demand seen rising to 91.46 million b/d, it means the world will have a net gain of 25,000 b/d for 2014, reversing years of deficit.
For both 2013 and 2014, the EIA expects both world supply and demand to set new highs, surging past the 90-million b/d level for the first time.
Consumption will reach 90.11 million b/d in 2013 and rise by 1.5% to 91.46 million b/d on the back of improved economic conditions.
In its previous forecast, the EIA had expected the world to consume 89.04 million b/d in 2012 and 90 million b/d in 2013.
The supply picture is capturing the bigger headline with total production surging by more than 2.72 million b/d over the next two years to 91.71 million b/d in 2014, said the EIA.
The EIA expects non‐OPEC production to increase by 1.4 million b/d in 2013 and 1.3 million b/d in 2014, thanks mostly to new supplies coming from the US and Canada.
Despite political and environmental risks, the EIA sees North America providing about two-thirds of the projected growth in non‐OPEC supply over the next two years.
US crude oil production is seen rising from 6.4 million b/d in 2012 to 7.3 million b/d in 2013 and 7.9 million b/d in 2014, which would mark the highest annual average level of production since 1988.
The EIA expects OPEC members to continue to produce at least 30 million b/d of crude oil over the next two years to accommodate the projected increase in world consumption and to counterbalance supply disruptions.
However, the agency is forecasting OPEC supply to fall by 600,000 b/d in 2013 and to stay flat through 2014. Most of the decrease in 2013 will come from Saudi Arabia, which is responding to supply competition from North America, Iraq, Nigeria and Angola.