(EnergyAsia, October 3 2014, Friday) — The US Energy Information Administration (EIA) has raised its forecasts for global oil supply over the next two years while retaining its previous month’s prediction for consumption growth to remain little changed.
In its September short-term outlook report, the agency said it expects global liquid fuels production to rise by 1.75% to 91.68 million b/d this year and by another 1.46% to 93.02 million b/d. These figures represent a continuing upgrade on the world’s crude and liquids supply outlook: the previous month report had called for production to rise by 1.24% to 91.56 million in 2014 and by 1.53 million b/d to 92.96 million b/d.
The reborn US upstream oil sector continues to confound with its production seen surging nearly 15% to 8.78 million b/d in 2015 and by 11.58% to 13.78 million b/d this year. The US and Canada will help lift non-OPEC production by 2.24% in 2015 and by 3.39% to 55.91 million b/d, said the EIA.
Unable to compete in this low-price environment, OPEC, on the other hand, will further retreat as a production powerhouse. Its production will fall by 0.69% to 35.77 million b/d this year before staging a small recovery of 0.25% to 35.86 million b/d next year.
On the demand side, the EIA expects the world to consume 91.55 million b/d this year and 92.98 million b/d in 2015, little changed from its August forecasts for 91.56 million b/d and 92.96 million b/d for the two respective years.
The September forecast calls for global oil demand to grow by 1.15% in 2014 and 1.56% in 2015, compared with the August predictions of 1.24% and 1.53% for the two years.
The agency has raised its forecast for North America’s oil demand to rise by 0.81% to 23.54 million b/d in 2015, while keeping unchanged its prediction for China’s oil demand at 10.98 million b/d this year and 11.41 million b/d in 2015.
The combination of rising supplies and stagnating demand growth is causing oil prices to weaken.
According to the EIA, rising crude exports from Libya have contributed to a drop in the North Sea Brent crude oil spot price to an average of US$102 per barrel in August, down US$5 from the July average and US$10 below June’s level.
For the first time in 14 months, the average Brent spot prices fell outside the relatively narrow trading range between US$107 and US$112.
The EIA said it expects Brent crude oil prices to average US$103 in the fourth-quarter of 2014 and US$103 in 2015, about US$5 and US$2 lower than forecast in the August report, respectively. The WTI discount to Brent, which averaged US$11 per barrel in 2013, is expected to fall to US$8 in both 2014 and 2015.
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
Sept 2014: EIA’s world liquids demand forecast, in million b/d
2013 2014 * y/y % 2015 * y/y %
- 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
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 %
- 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 %
- 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
*forecast
June 2014: EIA’s world liquids demand forecast, in million b/d
2013 2014 * y/y % 2015 * y/y %
- 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
EIA’s monthly forecasts for global oil demand
2014 2014/2013 2015 2015/2014
Sep 91.55 1.15% 92.98 1.56%
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%