Friday, November 23, 2012

Global Crude Oil and Liquid Fuels 2013.


Global Crude Oil and Liquid Fuels


EIA expects global oil markets to loosen in the
fourth quarter of 2012 as forecast liquid fuels supply, which was 0.7 million bbl/d lower than
world consumption in the third quarter of 2012, outpaces consumption by 0.1 million bbl/d in
the fourth quarter, leading to an increase in world inventories. Projected liquid fuels
consumption declines by 0.3 million bbl/d from the third quarter of 2012 to the fourth quarter
of 2012 while global production increases by 0.5 million bbl/d over the same period, as
members of the Organization of the Petroleum Exporting Countries (OPEC) continue to produce
more than 30 million bbl/d of crude oil and non‐OPEC countries recover from unplanned
outages and scheduled maintenance. EIA also expects global inventory builds to continue
during the first half of 2013, mostly due to an increase in non‐OPEC supply.

Global Crude Oil and Liquid Fuels Consumption.

 World liquid fuels consumption grew by an
estimated 1.0 million bbl/d in 2011. EIA expects world consumption growth of about 0.7 million
bbl/d in 2012 and 0.9 million bbl/d in 2013, with countries outside of the Organization for
Economic Cooperation and Development (OECD) driving global consumption growth.
Projected OECD liquid fuels consumption declines by 0.4 million bbl/d in 2012 and by an
additional 0.2 million bbl/d in 2013 below 2012. Although EIA forecasts U.S. liquid fuels
consumption to grow by 110 thousand bbl/d in 2013, this is more than offset by declines in
consumption in Europe and other OECD countries. At the same time, EIA expects that China’s
annual consumption growth to increase from 330 thousand bbl/d in 2012 to 430 thousand bbl/d
in 2013.

Non‐OPEC Supply. EIA estimates non‐OPEC liquid fuels production in October 2012 to be 0.3
million bbl/d above the same month last year, primarily because of increased crude oil
production from tight oil plays in the United States. Projected non‐OPEC production increases
by 1.3 million bbl/d in 2013 over 2012, largely due to continued production growth from U.S.
tight oil formations and Canadian oil sands. EIA slightly increased its forecast for Canada’s oil
sands output from last month’s Outlook, as Cenovus announced that its phased expansions of
the Christina Lake project are proceeding faster than expected.
Unplanned production outages in non‐OPEC countries declined in October to 0.9 million bbl/d,
from an average of 1.1 million bbl/d in September. The decrease was mostly due to the return
of the U.S. production in the U.S. Gulf of Mexico following disruptions related to the late August
landfall of Hurricane Isaac. Hurricane Isaac led to a peak shut‐in of 1.3 million bbl/d of U.S.
production in the Gulf of Mexico and average disruption volumes of 210 thousand bbl/d in
August and September.

Other unplanned disruptions persist in non‐OPEC countries, including those in Syria and Sudan.
An estimated 220 thousand bbl/d of production was offline in Syria in October, an increase
relative to September’s outage of 180 thousand bbl/d as a result of infrastructure damage related to 
cross‐border shelling between Turkey and Syria. South Sudan’s production still
remains offline as well, though the government recently ordered oil companies to restart
production and estimated that exports would resume in the following three months. EIA
forecasts Sudan and South Sudan’s production to average 120 thousand bbl/d in 2012 and
recover to 310 thousand bbl/d in 2013, still well below the pre‐shut‐in level of around 460
thousand bbl/d.
OPEC Supply. EIA expects that OPEC members will continue to produce more than 30 million
bbl/d of crude oil over the next two years to accommodate the projected increase in world oil
consumption and to counterbalance supply disruptions. Projected OPEC crude oil production
increases by about 1.2 million bbl/d in 2012 and falls by 0.5 million bbl/d in 2013. OPEC
production of noncrude oil liquids, which are not subject to production targets, increases by 0.3
million bbl/d and 0.2 million bbl/d in 2012 and 2013, respectively.

Production from OPEC member states has increased over the past year, especially in Libya and
Iraq, while Saudi Arabia continues to produce nearly 10 million bbl/d. There has also been
growth, although smaller, in Kuwait and the United Arab Emirates. Iraq’s production increased
to 3.2 million bbl/d in October 2012, compared with the year‐ago level of 2.7 million bbl/d. The
increased production was boosted by new infrastructure that facilitates exports of oil from
Iraq’s southern fields. Furthermore, new agreements on payments between the central
government in Baghdad and the Kurdistan Regional Government (KRG) have resulted in
resumed exports from the oil fields located in the area controlled by the KRG. Libyan crude oil
production remained near 1.5 million bbl/d in October, slowly approaching the pre‐crisis level of
near 1.7 million bbl/d.

Nigerian oil production declined for a second consecutive month in October to slightly less than
2.0 million bbl/d. Maintenance‐related outages reduced Nigeria’s production in September,
which fell again in October due to floods and pipeline sabotage. The floods mostly affected
onshore oil and gas production from Total and Eni and curtailed natural gas shipments to the
Bonny liquefied natural gas (LNG) facility. However, Total stated that increases from some of its
offshore oil fields partially compensated for the lost output. Meanwhile, pipeline sabotage
caused production delays and led Shell to declare force majeure on Bonny and Forcados crude
oil exports in mid‐October.


  special thanks to U.S. Department of Energy |

Global OPEC surplus capacity, overwhelmingly concentrated in Saudi Arabia, remains relatively
tight by historical standards, and is estimated at 2.0 million bbl/d over the past two months.
OPEC surplus capacity grows slowly over the next year to 3.3 million bbl/d by the second quarter
of 2013. This estimate does not include additional capacity that may be available in Iran, but
which is currently offline due to the impacts of U.S. and EU sanctions on Iran’s ability to sell its
OECD Petroleum Inventories. EIA estimates that OECD commercial oil inventories ended 2011
at 2.60 billion barrels, equivalent to just under 56 days of forward‐cover. Projected OECD oil
inventories increase to 2.65 billion barrels and just over 57 days of forward‐cover by the end of
2012. Forecast days of supply are at the highest end‐of‐year levels since 1991 because of the
decline in OECD consumption over the past seven years.
Crude Oil Prices. EIA projects the price of Brent crude oil will average $112 per barrel in 2012
and $103 per barrel in 2013, both mostly unchanged from last month’s Outlook. EIA expects the
WTI price to average $89 per barrel in the fourth quarter of 2012, about $4 lower than last
month’s Outlook¸ and to mostly remain at this level throughout the forecast period averaging
$88 per barrel in 2013. After increasing to $22 per barrel in October of this year, the WTI crude
oil spot price discount to the Brent crude oil spot price will average $20 per barrel in the fourth
quarter of 2012 before falling to $11 per barrel by the end of 2013, according to EIA.

Cratian Center of Renewable Energy Sources (CCRES)

1 comment:

  1. The European Parliament has rejected a proposal to ban new hydraulic fracturing operations on European Union territory, but while opportunities abound, they won’t be revolutionary just yet.

    Europe’s decision was necessary. There was simply too much at stake: Russia’s grip on the market has gotten too strong; EU natural gas production is on the decline; and consumers have not benefited from the US natural gas boom.
    Worse, if Europe does not embrace its shale potential, expensive energy could eventually drive energy-intensive industries elsewhere (like the US) and this would spell Europe’s economic doom. Industries in Europe pay on average three times the price for gas as their US counterparts.

    While Europe has serious environmental concerns about fracking, it will have to figure out how to address these with the appropriate regulations. The environmental resistance to fracking has led to an increase in European imports of polluting coal from the US to fill in the energy gap.
    In the end, the anti-fracking campaign is doing nothing for the environment—in fact, it may be harming it with the uptick in coal use.

    Still, the 27 member countries of the EU can take their own decisions on how to proceed with their shale reserves—and while some are on board, others are under no small amount of political pressure to bow to environmental concerns.

    There will be a number of complications for those who would like to see a shale revolution in Europe, from prohibitive environmental regulations and land ownership rules to extraction complications.
    Environmentalists, like CCRES , are concerned about fracking triggering earth tremors, about the potential for fracking chemicals to pollute ground water, and about the amount of water needed for fracking.