United States crude production is expected to rise by the largest
amount on record in 2013 and is set to soar by almost a quarter over the next
two years, the Energy Information Administration said on Tuesday.
The EIA, the independent statistical arm of the Department of
Energy, said US crude production would grow by 900,000 barrels per day this
year to 7.3 million bpd, Reuters reported.
Energy, said US crude production would grow by 900,000 barrels per day this
year to 7.3 million bpd, Reuters reported.
The agency’s forecast in the monthly Short-Term Energy Outlook is
300,000 bpd higher than its estimate in December, according to the news wire.
300,000 bpd higher than its estimate in December, according to the news wire.
While the rate of increase is seen slowing slightly in 2014 to
600,000 bpd, the total jump in US oil production to 7.9 million bpd would be up
23 per cent from the 6.4 million bpd pumped domestically in 2012.
600,000 bpd, the total jump in US oil production to 7.9 million bpd would be up
23 per cent from the 6.4 million bpd pumped domestically in 2012.
The rapid increase underscores how improvements in horizontal
drilling and hydraulic fracturing technology have transformed the US energy
market in the last five years, allowing producers to flow oil from tight rock
formations.
drilling and hydraulic fracturing technology have transformed the US energy
market in the last five years, allowing producers to flow oil from tight rock
formations.
The latest forecast from the EIA is the first to include 2014.
If the agency’s projections prove accurate, US crude oil
production will have risen by a massive 40% between 2011 and 2014. It will be
almost 50 per cent higher than at the beginning of the decade, bolstering the
argument of those who say North America could be energy independent by the end
of the decade.
production will have risen by a massive 40% between 2011 and 2014. It will be
almost 50 per cent higher than at the beginning of the decade, bolstering the
argument of those who say North America could be energy independent by the end
of the decade.
Administrator of the EIA, Adam
Sieminski, said that as output in North Dakota’s Bakken formation and Texas’
Eagle Ford fields has risen sharply over the past 12 months, US producers were
becoming even more prolific
Sieminski, said that as output in North Dakota’s Bakken formation and Texas’
Eagle Ford fields has risen sharply over the past 12 months, US producers were
becoming even more prolific
“The learning curve in the Bakken and Eagle Ford fields, which is
where the biggest part of this increase is coming from, has been pretty steep,”
Sieminski said.
where the biggest part of this increase is coming from, has been pretty steep,”
Sieminski said.
While he cautioned that the long-term outlook beyond 2020
suggested production from shale fields in the US may plateau, he said it was
possible analysts were still underestimating the potential of US shale-oil
output in the short-term.
suggested production from shale fields in the US may plateau, he said it was
possible analysts were still underestimating the potential of US shale-oil
output in the short-term.
The EIA said in the forecast that the rise in US output would
contribute to a well supplied market over the next two years. The agency said
that international Brent crude oil prices would fall slightly in 2013 to around
$105 a barrel on average from just under $112 last year, before falling to $99
a barrel in 2014.
contribute to a well supplied market over the next two years. The agency said
that international Brent crude oil prices would fall slightly in 2013 to around
$105 a barrel on average from just under $112 last year, before falling to $99
a barrel in 2014.
US benchmark West Texas Intermediate is
seen averaging $89 a barrel in 2013 and $91 a barrel in 2014.
seen averaging $89 a barrel in 2013 and $91 a barrel in 2014.
Global oil demand is forecast to rise by 900,000 bpd in 2013 to 90.1
million bpd led by fast-developing countries like China and India and is seen
rising by a further 1.4 million bpd in 2014, the EIA said.
million bpd led by fast-developing countries like China and India and is seen
rising by a further 1.4 million bpd in 2014, the EIA said.
In 2014, developing countries are seen making up more than 50
percent of total global oil demand for the first time, surpassing the
consumption of countries in the Organisation for Economic Co-operation and
Development.
percent of total global oil demand for the first time, surpassing the
consumption of countries in the Organisation for Economic Co-operation and
Development.
World oil supply is seen surpassing demand growth over the next
two years, however, forcing Opec to curb production, the EIA said.
two years, however, forcing Opec to curb production, the EIA said.
Non-Opec production is forecast to increase by 1.4 million bpd in
2013 and by 1.3 million bpd in 2014, the EIA said, though the agency warned
there are “considerable risks” to the forecast due to the rapid pace of the
evolution of the North American oil industry and geopolitical threats to
supplies.
2013 and by 1.3 million bpd in 2014, the EIA said, though the agency warned
there are “considerable risks” to the forecast due to the rapid pace of the
evolution of the North American oil industry and geopolitical threats to
supplies.
The EIA said Opec would continue to pump more than 30 million bpd
to help meet demand, but said it would likely curtail production by about
600,000 bpd this year led by group kingpin Saudi Arabia, to help balance the
market and support prices.
to help meet demand, but said it would likely curtail production by about
600,000 bpd this year led by group kingpin Saudi Arabia, to help balance the
market and support prices.
