lower oil prices and the energy outlook · source: eia, short-term energy outlook, july 2015 lower...

www.eia.gov U.S. Energy Information Administration Independent Statistics & Analysis

Lower oil prices and the energy outlook

For

Midwestern Legislative Conference 70th Annual Meeting

July 2015 | Bismarck, ND

By

Adam Sieminski

U.S. Energy Information Administration

0

5

10

15

20

25

30

0.0

10.0

20.0

30.0

40.0

50.0

60.0

U.S. is the largest producer of petroleum and natural gas in the world


July 2015 2

estimated U.S., Russia, and Saudi Arabia petroleum and natural gas production

quadrillion Btu million barrels per day of oil equivalent

United States

Russia

Saudi Arabia

petro-

leum

natural

gas

2008 2009 2010 2011 2012 2013 2014e

Note: Petroleum production includes crude oil, natural gas liquids, condensates, refinery processing gain, and other liquids, including biofuels;

barrels per day oil equivalent were calculated using a conversion factor of 1 barrel oil equivalent=5.55 million British thermal units (Btu)

Source: International Energy Statistics (EIA), July 2015 STEO (EIA), The 2014 Natural Gas Year in Review: First Estimates (CEDIGAZ)

The U.S. has experienced a rapid increase in natural gas and oil

production from shale and other tight resources

3

Sources: EIA derived from state administrative data collected by DrillingInfo Inc. Data are through May 2015 and represent

EIA’s official tight oil & shale gas estimates, but are not survey data. State abbreviations indicate primary state(s).


July 2015

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0Eagle Ford (TX)

Bakken (MT & ND)

Spraberry (TX & NM Permian)

Bonespring (TX & NM Permian)

Wolfcamp (TX & NM Permian)

Delaware (TX & NM Permian)

Yeso-Glorieta (TX & NM Permian)

Niobrara-Codell (CO, WY)

Haynesville

Utica (OH, PA & WV)

Marcellus

Woodford (OK)

Granite Wash (OK & TX)

Austin Chalk (LA & TX)

Monterey (CA)

U.S. tight oil production

million barrels of oil per day

0

5

10

15

20

25

30

35

40

45Marcellus (PA & WV)

Haynesville (LA & TX)

Eagle Ford (TX)

Fayetteville (AR)

Barnett (TX)

Woodford (OK)

Bakken (ND)

Antrim (MI, IN, & OH)

Utica (OH, PA & WV)

Rest of US 'shale'

U.S. dry shale gas production

billion cubic feet per day

EIA’s new data series on crude-by-rail (CBR) provides direct

estimates for crude oil movements


July 2015 4

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

AAR (crude oil and petroleum products)

EIA (crude oil only)

monthly average of rail carloads per week

Source: Association of American Railroads (AAR) RailTime Indicators and U.S. Energy Information Administration,

based on Surface Transportation Board and other information

million barrels per day

5

Annual CBR flows, 2010 – 2014 2010 2011

2012

2013

2014


July 2015

Production growth in top crude producing regions (Permian,

Bakken, Niobrara, and Eagle Ford) reverses in early 2015

6

monthly percent change

three month rolling average

Source: EIA, DPR, June 2015


July 2015

-2.0%

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

Jan 2012 Jan 2013 Jan 2014 Jan 2015

Short-term considerations

7 Lower oil prices and the energy outlook

July 2015

For oil prices, the market-implied confidence band is very wide

8

WTI price

dollars per barrel

Source: EIA, Short-Term Energy Outlook, July 2015

0

25

50

75

100

125

150

Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct

Historical Spot Price

STEO Forecast

NYMEX Futures Price

Current 95% NYMEX futures price confidence interval

July 2014 95% NYMEX futures price confidence interval

2013 2014 2015 2016


July 2015

North American oil production growth slows with lower oil

prices but remains the main driver of global production growth

9

world crude oil and liquid fuels production growth




July 2015

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

2014 2015 2016

OPEC countries North America

Russia and Caspian Sea Latin America

North Sea Other Non-OPEC

Forecast

Surprises in liquid fuel demand to the upside are rare

10

world liquid fuels consumption




July 2015

annual change


Forecast

-2

-1

0

1

2

3

4

5

6

7

8

76

78

80

82

84

86

88

90

92

94

96

2008 2009 2010 2011 2012 2013 2014 2015 2016

Change in U.S. consumption (right axis)

Change in China consumption (right axis)

Change in other consumption (right axis)

Total world consumption (left axis)

Oil supply and demand begin to rebalance in 2016

11

million barrels per day MMbbl/d

Source: EIA, Short-Term Energy Outlook, June 2015


July 2015

-3

-2

-1

0

1

2

3

4

5

6

78

80

82

84

86

88

90

92

94

96

98

2010-Q1 2011-Q1 2012-Q1 2013-Q1 2014-Q1 2015-Q1 2016-Q1

Implied stock change and balance (right axis)

World production (left axis)

World consumption (left axis)

OECD commercial crude oil stocks remain high

12

days of supply



July 2015

Forecast

45

50

55

60

65

70

Jan 2010 Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016

OPEC surplus crude oil production capacity remains moderate

to low

13




July 2015

0

1

2

3

4

5

6

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Forecast

Note: Shaded area represents 2004-2014 average (2.2 MMb/d)

Long-term considerations


July 2015

0

40

80

120

160

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

World crude oil price projection is lower in the AEO2015

Reference case than in AEO2014, particularly in the near term

15

Brent crude oil spot price

2013 dollars per barrel

Source: EIA, Annual Energy Outlook 2015 Reference case and Annual Energy Outlook 2014 Reference case

History Projections 2013

AEO2014

AEO2015


July 2015

All of the growth in liquid fuels consumption occurs in the

emerging non-OECD (million barrels per day)

0

30

60

90

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

petroleum and other liquid fuels consumption, 1990-2040


Source: EIA, International Energy Outlook 2014


July 2015 16

projections history 2010

OECD

Non-OECD

Most significant contributors to non-OPEC crude and lease

condensate production: Canada, Brazil, U.S., Kazakhstan, Russia

0

6

12

18

24

Canada United States Mexico Brazil Kazakhstan Russia Other

2010 2025 2040

non-OPEC crude and lease condensate production, Reference case


Source: EIA, International Energy Outlook 2014


July 2015 17

U.S. crude oil production rises above previous historical highs before

2020 in all AEO2015 cases, with a range of longer-term outcomes

18

U.S. crude oil production


Source: EIA, Annual Energy Outlook 2015

0

5

10

15

20

1990 2000 2010 2020 2030 2040 2020 2030 2040 2020 2030 2040

Tight oil

Alaska

Lower 48 offshore

History 2013 2013 2013

U.S. maximum production level of

9.6 million barrels per day in 1970

Other lower 48 onshore

Reference High Oil and Gas

Resource Low Oil Price


July 2015

U.S. natural gas imports and exports

trillion cubic feet

-8

-4

0

4

8

12

16

2000 2010 2020 2030 2040 2020 2030 2040 2020 2030 2040

LNG imports

Source: EIA, Annual Energy Outlook 2015

19

billion cubic feet per day

Projected U.S. natural gas exports reflect the spread between domestic

natural gas prices and world energy prices

Projections History 2013

-10

0

10

20

2013 2013

30

40

-20 Reference Low Oil Price

High Oil and Gas

Resource

Pipeline exports

to Mexico

Lower 48 states

LNG exports

Pipeline exports to Canada Pipeline imports from Canada

Alaska LNG exports


July 2015

EIA is publishing a series of reports on U.S. crude exports


July 2015

Report Publish date

U.S. crude oil production forecast—analysis of crude types www.eia.gov/analysis/petroleum/crudetypes/

May 2014

What drives U.S. gasoline prices www.eia.gov/analysis/studies/gasoline/

October 2014

U.S crude oil import tracking tool www.eia.gov/beta/petroleum/imports/browser/

November 2014

Technical options for processing additional light tight oil

volumes within the United States www.eia.gov/analysis/studies/petroleum/lto/

April 2015

Implications of increasing light tight oil production for U.S.

refining (Turner Mason) www.eia.gov/analysis/studies/petroleum/morelto/

April 2015

U.S. crude oil production to 2025: Updated projection of

crude types http://www.eia.gov/analysis/petroleum/crudetypes/

May 2015

Effects of relaxing U.S. crude export restrictions August 2015

http://www.eia.gov/analysis/petroleum/crudetypes/

http://www.eia.gov/analysis/studies/gasoline/

http://www.eia.gov/beta/petroleum/imports/browser/

http://www.eia.gov/analysis/studies/petroleum/lto/

http://www.eia.gov/analysis/studies/petroleum/morelto/

http://www.eia.gov/analysis/studies/petroleum/morelto/




July 2015 21

For more information

22

U.S. Energy Information Administration home page | www.eia.gov

Annual Energy Outlook | www.eia.gov/aeo

Short-Term Energy Outlook | www.eia.gov/steo

International Energy Outlook | www.eia.gov/ieo

Monthly Energy Review | www.eia.gov/mer

Today in Energy | www.eia.gov/todayinenergy

State Energy Profiles | www.eia.gov/state

Drilling Productivity Report | www.eia.gov/petroleum/drilling/

International Energy Portal | www.eia.gov/beta/international/?src=home-b1


July 2015

http://www.eia.gov/

http://www.eia.gov/aeo

http://www.eia.gov/steo

http://www.eia.gov/ieo

http://www.eia.gov/mer

http://www.eia.gov/todayinenergy

http://www.eia.gov/state

http://www.eia.gov/petroleum/drilling/

lower oil prices and the energy outlook · source: eia, short-term energy outlook, july 2015 lower...

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