U.S. Energy Information Administration - EIA - Independent Statistics and Analysis
Short-Term Energy Outlook
Global Crude Oil and Liquid Fuels
Global Crude Oil and Liquid Fuels Overview
Although total unplanned production outages worldwide remained at 2.9 million bbl/d in October, crude oil prices fell toward the end of the month, reflecting lower seasonal liquid fuels consumption. Outages among producers who are not members of the Organization of the Petroleum Exporting Countries (OPEC) rose by nearly 0.1 million bbl/d month-over-month in October because of new disruptions in the United States, Brazil, Canada, and Colombia.
Nonetheless, expected growth in non-OPEC liquid fuels production leads to a projected decline in the call on OPEC crude oil and global stocks (world consumption less non-OPEC production and OPEC non-crude oil production) from an average of 30.2 million bbl/d in 2013 to 29.6 million bbl/d in 2014.
Global Crude Oil and Liquid Fuels Consumption
EIA projects global consumption, which averaged 89.2 million bbl/d in 2012, will grow annually by 1.1 million bbl/d in both 2013 and 2014. China, the Middle East, Central & South America, and other countries outside of the Organization for Economic Cooperation and Development (OECD) account for nearly all consumption growth. Projected OECD liquid fuels consumption declines by 0.1 million bbl/d in 2013 and 0.2 million bbl/d in 2014. The declines in OECD consumption are largely due to lower consumption in Europe and Japan. Non-OECD Asia, particularly China, is the leading contributor to projected global consumption growth. EIA estimates that liquid fuels consumption in China will increase by 420,000 bbl/d in 2013 and by a further 430,000 bbl/d in 2014.
Forecast non-OPEC liquid fuels production, which averaged 52.7 million bbl/d in 2012, increases by 1.6 million bbl/d in 2013 and by 1.5 million bbl/d in 2014. The largest non-OPEC supply growth is in North America, where projected production increases by 1.5 million bbl/d and 1.1 million bbl/d in 2013 and 2014, respectively, reflecting continued production growth in U.S. onshore tight oil formations and from Canadian oil sands. EIA expects smaller production growth from a number of other areas, including Central & South America, Asia & Oceania, and Africa. Of the 2.9 million bbl/d of global unplanned supply disruptions in October, approximately 0.7 million bbl/d occurred among non-OPEC producers.
EIA projects total OPEC liquid fuels production to decline by 0.8 million bbl/d to 35.9 million bbl/d in 2013 and to stay near that level in 2014. The declines in 2013 mostly reflect supply outages among some OPEC producers, along with an average annual decrease in Saudi Arabia's production in 2013. Nonetheless, Saudi Arabia's crude oil production averaged 10.1 million bbl/d in the third quarter of 2013 as it boosted production in response to a seasonal increase in direct crude burn for electric power generation and lower production by other OPEC producers, including Libya and Iraq. EIA expects Saudi Arabia to begin reducing its production in early 2014 as some of the disrupted production comes back on line and non-OPEC supply continues to grow.
Total OPEC crude oil unplanned disruptions in October averaged 2.2 million bbl/d, falling slightly compared with the September average. The decrease reflects restoration of some of Libya's disrupted volumes in mid-September. However, Libyan disruptions increased again in late October. Because Libya has experienced several major swings in production since June, estimates of the monthly average disruption can obscure developments over shorter time periods.
Planned maintenance work started on Iraq's southern export terminals in September, and should continue through the end of 2013. The planned outage contributed to an almost 400,000 bbl/d monthly decrease in total Iraqi crude oil output in October. EIA excludes planned outages from unplanned outage estimates. EIA estimates that unplanned crude oil disruptions in Iraq were 340,000 bbl/d in October, stemming mostly from additional attacks on the Kirkuk-Ceyhan pipeline between Iraq and Turkey.
Total OPEC surplus crude oil production capacity in the third quarter of 2013 averaged 1.7 million bbl/d, which was 0.3 million bbl/d below the year-ago level and 1.4 million bbl/d lower than the historical 2010-12 average. OPEC surplus crude oil production capacity during the third quarter was the lowest for any quarter since the third quarter of 2008, when it fell below 1.0 million bbl/d.
EIA projects OPEC surplus capacity will increase from an average of 1.7 million bbl/d in September to 2.5 million bbl/d in December 2013, and 4.0 million bbl/d at the end of 2014. These estimates do not include additional capacity that may be available in Iran but is currently off line because of the effects of U.S. and European Union sanctions on Iran's oil sector.
OECD Petroleum Inventories
EIA estimates that OECD commercial oil inventories at the end of 2012 totaled 2.65 billion barrels, equivalent to roughly 58 days of supply. OECD oil inventories are projected to end 2013 at 2.59 billion barrels and end 2014 at 2.61 billion barrels.
Crude Oil Prices
Brent crude oil spot prices fell from a monthly average of $112 per barrel in September 2013 to an average of $109 per barrel during October. EIA expects the Brent crude oil price to continue to weaken as non-OPEC supply growth exceeds growth in world consumption. The Brent crude oil price is projected to average $106 per barrel by December 2013 and $103 per barrel in 2014.
The forecast WTI crude oil spot price, which averaged $106 per barrel during September, fell to an average of $101 per barrel in October. EIA expects that WTI crude oil prices will average $97 per barrel during the fourth quarter of 2013 and $95 per barrel during 2014. The discount of WTI crude oil to Brent crude oil, which averaged $18 per barrel in 2012 and then fell to $3 per barrel in July 2013, averaged $9 per barrel during October. EIA expects the WTI discount to average $10 per barrel during the fourth quarter of 2013 and $8 per barrel during 2014.
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 February 2014 delivery traded during the five-day period ending November 7, 2013, averaged $95 per barrel. Implied volatility averaged 20%, establishing the lower and upper limits of the 95% confidence interval for the market's expectations of monthly average WTI prices in February 2014 at $80 per barrel and $112 per barrel, respectively. Last year at this time, WTI for February 2013 delivery averaged $87 per barrel and implied volatility averaged 31%. The corresponding lower and upper limits of the 95% confidence interval were $66 per barrel and $115 per barrel.
|International Crude Oil and Liquid Fuels Summary|
|2011||2012||2013 projected||2014 projected|
a Weighted by oil consumption.
b Foreign currency per U.S. dollar.
|Supply & Consumption||(million barrels per day)|
|OPEC Crude Oil Portion||29.82||30.89||30.05||29.72|
|Total World Production||87.53||89.31||90.10||91.54|
|OECD Commercial Inventory (end-of-year)||2598||2649||2587||2614|
|Total OPEC surplus crude oil production capacity||3.01||2.13||2.20||3.41|
|Total World Consumption||88.56||89.17||90.25||91.39|
|Primary Assumptions||(percent change from prior year)|
|World Real Gross Domestic Producta||2.9||2.8||2.2||3.1|
|Real U.S. Dollar Exchange Rateb||-2.6||3.8||3.8||2.1|