EIA: Global oil demand to rise 1.2 million b/d in 2014

Global liquid fuels consumption is forecast to increase by 1.2 million b/d in 2014 and by another 1.4 million b/d in 2015, according to the US Energy Information Administration's Short-Term Energy Outlook (STEO), released this month.

Countries outside of the Organization for Economic Cooperation and Development, led by China, account for nearly all consumption growth over the forecast period, EIA said. OECD consumption is expected to decline by 0.1 million b/d in 2014 and remain flat in 2015.

EIA forecasts OPEC crude oil production to decline by 0.5 million b/d in 2014, as some OPEC producers cutting back production to accommodate non-OPEC supply growth. In 2015, overall OPEC production is to remain close to its 2014 level while some key member countries continue to reduce their output to accommodate assumed production recovery from Iraq and Angola.

In 2014, non-OPEC supply growth is expected to grow by 1.9 million b/d in 2014 and 1.5 million b/d in 2015, with the largest production growth from North America. Syria and Yemen will continue to account for a large portion of non-OPEC supply disruptions over the next 2 years.

Total US liquid fuels consumption in 2014 is forecast to average 18.88 million b/d, flat from last year. EIA projects a 0.1% decline in motor gasoline consumption, as improving fuel efficiencies and slowdown of the recent growth in highway travel. Distillate fuel oil consumption is forecast to rise by 40,000 b/d in 2014. Ethane consumption increases 5.8% to average 60,000 b/d in 2014 as ethylene plant capacity expansions contribute to an increase in ethane cracking capacity.

EIA expects crude oil production to increase from an estimated 7.5 million b/d in 2013 to 8.5 million b/d in 2014 and 9.3 million b/d in 2015. The production growth is primarily concentrated in the Bakken, Eagle Ford, and Permian regions. The growth in US production contributes to a significant decline in petroleum imports, with net import share down to 24% in 2015 from 33% in 2013.

Forecast average US gas demand in 2014 is down 1.6 bcfd from last year due to milder winter temperatures and lower gas use by the electric power sector. The projected year-over-year increases in gas prices contribute to declines in gas used for electric power generation to 21.7 bcfd in 2014 from 22.3 bcfd in 2013. However, the amount of natural gas use in 2015 will rebound as retirements of coal power plants rise in response to the implementation of the Mercury and Air Toxics Standards. EIA expects gas consumption in the power sector to increase to 22.6 bcfd in 2015.

Natural gas marketed production grows at an average rate of 2.1% in 2014 and 1.3% in 2015, according to EIA. Rapid Marcellus production is causing natural gas forward prices in the Northeast to fall even with or below Henry Hub prices outside of peak-demand winter months, leading some drilling activity there to move back to Gulf Coast plays such as the Haynesville and Barnett.

Total US liquid fuels consumption in 2014 is forecast to average 18.88 million b/d, flat from last year.
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This has to be wrong. USA oil demand in 2013 took oil analysts by surprise by rising by something like 330,000 b/d. That came mostly in the last quarter.

The economic trends are toward more economic activity in 2014 and thus more demand for oil. Which means the number for the full year of US demand would have to be much higher than 330,000 barrels b/d.

So that has to mean that production and consumption will stay fairly closely balanced in 2014.

A year ago:

Projected total liquid fuels consumption increases by 70,000 bbl/d (0.4 percent) in 2013 and by 60,000 bbl/d in 2014.

http://www.eia.gov/forecasts/steo/archives/jan13.pdf
U.S. Crude Oil and Liquid Fuels
U.S. Liquid Fuels Consumption.
Page 4

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six months ago:

Total liquid fuels consumption for the first half of 2013 rose an estimated 140,000 bbl/d (0.8 percent) compared with the same period last year, led by increases in liquefied petroleum gas and distillate consumption. Part of that increase was because of colder weather, with heating degree days in the Northeast 21 percent higher than the first quarter of 2012. The second half of 2013 sees a forecast year-over-year increase in total liquid fuels consumption of 70,000 bbl/d (0.4 percent). For 2014, the forecast of total liquid fuels consumption growth slows to 30,000 bbl/d (0.2 percent).

http://www.eia.gov/forecasts/steo/archives/jul13.pdf
U.S. Crude Oil and Liquid Fuels
U.S. Liquid Fuels Consumption
Page 5

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three months ago:

Total liquid fuels consumption for the first three quarters of 2013 rose 110,000 bbl/d (0.6%) compared with the same period last year, led by increases in liquefied petroleum gas and distillate consumption. Motor gasoline and jet fuel consumption, however, remained relatively flat, reflecting moderate growth in travel activity offset by continued efficiency growth for both fuels. These patterns extend to the fourth quarter, resulting in overall liquid consumption growth of 0.7% for the year as a whole. In 2014, total consumption of liquid fuels remains close to its 2013 level.

http://www.eia.gov/forecasts/steo/archives/oct13.pdf
U.S. Crude Oil and Liquid Fuels
U.S. Liquid Fuels Consumption
Page 6

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