Absent a significant oil-supply disruption, EIA expects the recent tightening of world oil markets to moderate in 2012 and to resume in 2013.
US oil consumption is forecast to average 18.96 million b/d this year and 19.01 million b/d in 2013 vs. 18.87 million b/d in 2011.
Total oil demand in countries of the Organization for Economic Cooperation and Development is forecast to decline this year to 45.56 million b/d following last year's 420,000 b/d decline to 45.68 million b/d, as a decline in European demand outweighs modest demand growth in North America. OECD demand for 2013 is forecast to average 45.73 million b/d.
Non-OECD countries will account for most of the world's oil demand growth over the forecast period with the largest gains in China, the Middle East, and Brazil. EIA forecasts non-OECD oil consumption will climb by 1.4 million b/d this year to average 43.82 million b/d and by another 1.3 million b/d in 2013. This compares to demand growth of 1.5 million b/d in 2011 by EIA estimates.
Oil supply outlook
Including crude oil and liquid fuels production, oil supply from non-OPEC countries will increase by 910,000 b/d in 2012 and by 760,000 b/d in 2013, led by output in North America due to continuing production growth from US onshore shale formations and Canadian oil sands.
EIA forecasts that US crude oil production will average 5.74 million b/d this year, increasing by 170,000 b/d from 2011, and will climb by a further 80,000 b/d in 2013. Continued increases in Lower 48 onshore production of 270,000 b/d this year and 110,000 b/d in 2013 will overshadow declines of about 30,000 b/d in Alaskan output each year as well as a decline of 80,000 b/d in Gulf of Mexico production in 2012.
The US will continue to be a net product exporter through the forecast horizon, EIA said, with net product exports averaging 310,000 b/d in 2012 and 290,000 b/d in 2013. For the first time since 1949, the US last year was a net exporter of refined petroleum products, with gross product exports averaging 380,000 b/d more than gross product imports.
EIA expects that the market will rely on both inventories and increases in production of crude oil and non crude liquids in OPEC member countries to meet global demand growth. OPEC crude oil production will increase by about 90,000 b/d in 2012 to average 29.96 million b/d and by 590,000 b/d in 2013, according to the outlook.
OPEC non crude petroleum liquids, which are not subject to production targets, increase by 410,000 b/d in 2012 to average 6.32 million b/d and by another 250,000 b/d in 2013.
EIA forecasts that OPEC surplus production capacity will increase to 3.7 million b/d at the end of 2013 from about 2.3 million b/d at yearend 2011 in part due to the assumed recovery of Libyan production to predisruption levels.
Brazil-where production is expected to increase annually by an average of 170,000 b/d over the next 2 years with increased output from its offshore, presalt oil fields-will be a major production-growth area, as will Kazakhstan, which will begin production in Kashagan field in 2013 and increase production annually by an average of 125,000 b/d. EIA said.
Production will also increase in Colombia, Norway, and China, but notable production declines will occur in Russia, Mexico, Sudan, and the UK, the report said.
EIA expects the price of West Texas Intermediate oil to average about $100/bbl in 2012, $5/bbl higher than the average price last year. For 2013, EIA expects WTI prices to continue to rise, reaching $106/bbl in the fourth quarter of next year. EIA's forecast assumes that US real gross domestic product grows by 1.8% in 2012 and by 2.5% in 2013.
Many uncertainties could push oil prices higher or lower than projected, EIA warned. Should a significant oil supply disruption occur, OPEC members do not increase production, or projected non-OPEC projects come online more slowly than expected, oil prices could be much higher. And if the pace of global economic growth fails to accelerate in OECD countries or if economic growth slows in non-OECD countries, then reduced demand could lower prices.
EIA expects regular-grade motor gasoline retail prices to average $3.48/gal in 2012, down 4¢/gal from last year, and $3.55/gal in 2013. For the latest updates on the stock market, visit Stock Market Today For the latest updates PRESS CTR + D or visit Stock Market news Today