Crude oil prices fell sharply in the fourth quarter of 2014 as robust global production exceeded demand. After reaching monthly peaks of $112 per barrel (bbl) and $105/bbl in June, crude oil benchmarks Brent and West Texas Intermediate (WTI) fell to $62/bbl and $59/bbl in December, respectively.
Brent prices fell below the five-year average in early September and slipped well below the five-year range in November and December. WTI prices have been below the five-year average since early October and below the five year-range since early November.
Domestic crude oil production increased 1.2 million barrels per day (bbl/d) in 2014, up 16% from 2013. At 8.6 million bbl/d, U.S. production is at the highest level in nearly 30 years.
The Brent-WTI spread averaged less than $6/bbl, significantly lower than the 2011-13 average of nearly $15/bbl.
Estimated global liquids production grew by 1.8 million bbl/d to total 92.0 million bbl/d in 2014, mainly reflecting non-OPEC (Organization of the Petroleum Exporting Countries) production increases concentrated in North America.
EIA estimates that global unplanned supply disruptions averaged 3.1 million bbl/d in 2014, 0.4 million bbl/d higher than the previous year. OPEC producers had the largest share of outages at 2.5 million bbl/d.
EIA estimates that global liquid fuels production exceeded consumption in each of the four quarters of 2014. In the previous five years, production had not exceeded consumption for more than two consecutive quarters.