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.
US crude oil, liquid fuels
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.
US natural gas
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.