Friday, July 18, 2014
OPEC: Rising global oil demand driven by U.S.
Global demand for oil will pick up next year as U.S. consumption reverses a four-year decline, and the United States will produce an increasing share of the world’s supply, the Organization of the Petroleum Exporting Countries said Thursday.
As the world economy continues to recover, oil demand will grow by 1.2 million barrels per day next year (up from 1.1 million estimated for 2014) partly because of rising U.S. consumption, the 12-member oil producers’ group said in its first 2015 forecast.
Since 2010, fuel conservation and weak economies have lowered oil consumption in most
industrialized countries. While OPEC expects oil demand will continue to shrink in Europe, it sees an uptick in China and even faster growth in the United States, where demand is forecast to rise 180,000 barrels a day in 2015.
Surging U.S. crude oil production, due mostly to extraction from shale deposits in North Dakota and Texas, will help meet this growing demand. It’s expected to grow 7% to 13.12 million barrels a day next year, OPEC said. The United States strictly limits how much crude oil can be exported.
In its own forecast Tuesday, the U.S. government said the nation’s oil production – rising steadily since 2008 - will likely reach its highest level next year since 1972. Jumping from 5 million barrels per day in 2008 to 7.4 million last year, production is expected to average 8.5 million per day this year and 9.3 million next year, according to the Energy Information Administration, the analytical arm of the Department of Energy.
The OPEC forecast says the United States will see the highest production growth of any non-OPEC country. In contrast, OPEC said its production, which fell in 2012 and 2013, has continued to dip this year. Its June total, 29.7 million barrels per day, was 79,000 barrels less than that of May, driven mostly by unrest in Iraq where Islamic Sunni militants seized control last month of northern areas including Mosul.
“Iraq led the crude oil output decrease while crude oil production from Saudi Arabia and Nigeria experienced an increase in June,” OPEC said. Iraq remains OPEC’s second-largest producer, after Saudi Arabia, although Iran, Kuwait and United Arab Emirates are not far behind.
The report said OPEC won’t likely benefit from the rising global demand. It expects demand for its oil will, for the third straight year, continue to decrease — about 300,000 barrels a day in 2015. As a result, its share of the world’s crude oil market will fall from 35% in 2012 to 32% next year.