U.S. Energy Information Administration - EIA - Independent Statistics and Analysis
Short-Term Energy Outlook
Global Petroleum and Other Liquids
EIA's world oil balance is virtually unchanged from last month's STEO. EIA still expects the balance to remain relatively tight, with surplus crude oil production capacity averaging 2.1 million bbl/d in 2014 and 2.7 million bbl/d in 2015. Global unplanned supply disruptions remain at an elevated level and averaged 3.2 million bbl/d in July, of which Libya accounted for more than one-third. Libya's outages declined slightly in July, but Libya continues to experience swings in its production. Most of Iraq's northern production (outside of the Kurdistan area) remains offline, while Iraq's southern production and export volumes continue to be unaffected despite the ongoing unrest in northern and western Iraq.
EIA projects world petroleum and other liquids supply to increase by 1.5 million bbl/d in 2014 and by another 1.3 million bbl/d in 2015, with most of the growth coming from countries outside of the Organization of the Petroleum Exporting Countries (OPEC). Forecast non-OPEC supply grows by 1.8 million bbl/d in 2014 and 1.1 million bbl/d in 2015. The United States and Canada account for much of this growth. Projected world liquid fuels consumption grows by an annual average of 1.1 million bbl/d in 2014 and 1.4 million bbl/d in 2015. Countries outside the Organization for Economic Cooperation and Development (OECD), notably China, drive expected consumption growth.
Global Petroleum and Other Liquids Consumption
EIA estimates that global consumption grew by 1.3 million bbl/d (1.4%) in 2013, averaging 90.4 million bbl/d for the year. EIA expects global consumption to grow by 1.1 million bbl/d in 2014 and 1.4 million bbl/d in 2015. Projected global oil-consumption-weighted real GDP, which increased by an estimated 2.6% in 2013, grows by 2.7% and 3.4% in 2014 and 2015, respectively.
Non-OECD countries account for nearly all of the expected consumption growth in 2014 and 2015. China is the leading contributor to projected global consumption growth, with consumption increasing by 0.37 million bbl/d (3.5%) in 2014 and 0.43 million bbl/d in 2015. Oil consumption growth in 2013 was revised downward to 0.33 million bbl/d to better reflect the slowdown in China's economic expansion. 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.
EIA expects a 0.18-million-bbl/d decline in OECD petroleum and other liquids consumption in 2014, led by projected consumption declines in both Japan and Europe. EIA expects Japan's oil consumption to fall by an annual average of 0.13 million bbl/d in 2014 and 0.16 million bbl/d in 2015, as the country continues to increase natural gas and coal consumption in the electricity sector and returns some nuclear power plants to service in 2015. EIA projects that OECD Europe's consumption, which fell by 0.12 million bbl/d in 2013, will decline by 0.12 million bbl/d in 2014 and by a further 0.03 million bbl/d in 2015. The 2015 OECD Europe consumption forecast represents a downward revision from the 0.06-million-bbl/d increase in last month's STEO. U.S. petroleum and other liquids consumption, which increased by 0.40 million bbl/d in 2013, is expected to be flat in 2014 and then increase by 0.09 million bbl/d in 2015.
EIA estimates that non-OPEC liquids production grew by 1.3 million bbl/d in 2013, averaging 54.0 million bbl/d for the year. EIA expects non-OPEC liquids production to grow by 1.8 million bbl/d in 2014 and 1.1 million bbl/d in 2015. EIA forecasts production from the United States and Canada to grow by a combined annual average of 1.6 million bbl/d in 2014 and 1.1 million bbl/d in 2015. EIA estimates that Eurasia's production will rise by an annual average of 0.05 million bbl/d in 2014, led by Russia. However, production in the region declines by 0.09 million bbl/d in 2015. This forecast assumes the current economic sanctions on Russia do not affect Russian oil production in the short term.
Unplanned supply disruptions among non-OPEC producers averaged 0.6 million bbl/d in July, slightly higher than the estimated June level. South Sudan, Syria, and Yemen accounted for 79% of total non-OPEC supply disruptions. EIA does not assume a disruption to oil supply or demand as a result of ongoing events in Ukraine.
EIA estimates that OPEC crude oil production averaged 29.9 million bbl/d in 2013, a decline of 1.0 million bbl/d from the previous year, primarily reflecting increased outages in Libya, Nigeria, and Iraq, along with strong non-OPEC supply growth. EIA expects OPEC crude oil production to fall by 0.3 million bbl/d in 2014 and by less than 0.1 million bbl/d in 2015 to accommodate growing production in non-OPEC countries.
Unplanned crude oil supply disruptions among OPEC producers averaged 2.6 million bbl/d in July 2014, slightly lower than the previous month because of decreased outages in Libya. Libya continues to experience swings in its production, contributing to changes in the OPEC disruption estimate.
EIA expects OPEC surplus crude oil production capacity, which is concentrated in Saudi Arabia, to average 2.1 million bbl/d in 2014 and 2.7 million bbl/d in 2015. These estimates do not include additional capacity that may be available in Iran but is offline because of the effects of U.S. and European Union sanctions on Iran's ability to sell its oil.
OECD Petroleum Inventories
EIA estimates that OECD commercial oil inventories totaled 2.55 billion barrels at the end of 2013, equivalent to roughly 55 days of consumption. Projected OECD oil inventories rise to 2.57 billion barrels at the end of 2014.
Crude Oil Prices
North Sea Brent crude oil spot prices averaged $107/bbl in July, a decrease of $5/bbl from June. July was the 13th consecutive month in which average Brent crude oil spot prices fell within a relatively narrow range of $107/bbl to $112/bbl. The forecast Brent crude oil price averages $108/bbl in 2014, $1/bbl lower than in last month's STEO, and $105/bbl in 2015, which is unchanged from last month's STEO.
The WTI crude oil spot price increased from an average of $102/bbl in May to $106/bbl in June, before falling to $104/bbl in July. Driven in part by the relocation of crude oil to refining centers along the Gulf Coast through new pipelines, crude oil inventory levels at the Cushing, Oklahoma, storage hub, the futures market's delivery point for WTI, have fallen by more than half since early this year, from nearly 42 million barrels on January 24 to below 18 million barrels on July 25, the lowest level since October 2008. The discount of WTI crude oil to Brent crude oil averaged more than $13/bbl from November 2013 through January 2014. Record high refinery runs contributed to the WTI discount falling to $3/bbl in July, which was the same level seen during July 2013 when refinery runs were similarly at their seasonal peak for the year. EIA now expects the discount of WTI to Brent crude oil to average $7/bbl in the second half of 2014 and $9/bbl in 2015, reductions of $2/bbl and $1/bbl, respectively, from last month's STEO.
Energy price forecasts are highly uncertain, and the current values of futures and options contracts suggest that prices could differ significantly from the forecast levels (Market Prices and Uncertainty Report). WTI futures contracts for November 2014 delivery, traded during the five-day period ending August 7, averaged $96/bbl. Implied volatility averaged 16%, establishing the lower and upper limits of the 95% confidence interval for the market's expectations of monthly average WTI prices in November 2014 at $84/bbl and $111/bbl, respectively. Last year at this time, WTI for November 2013 delivery averaged $103/bbl and implied volatility averaged 21%. The corresponding lower and upper limits of the 95% confidence interval were $85/bbl and $125/bbl.
|Global Petroleum and Other Liquids|
|2012||2013||2014 projected||2015 projected|
a Weighted by oil consumption.
b Foreign currency per U.S. dollar.
|Supply & Consumption||(million barrels per day)|
|OPEC Crude Oil Portion||30.91||29.91||29.57||29.55|
|Total World Production||89.78||90.17||91.65||92.98|
|OECD Commercial Inventory (end-of-year)||2647||2550||2575||2584|
|Total OPEC surplus crude oil production capacity||2.11||2.14||2.13||2.65|
|Total World Consumption||89.17||90.44||91.56||92.96|
|Primary Assumptions||(percent change from prior year)|
|World Real Gross Domestic Producta||2.8||2.6||2.7||3.4|
|Real U.S. Dollar Exchange Rateb||3.8||3.6||2.3||1.6|
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