Effects of low oil prices for 19th Annual Energy Risk Summit May 12, 2015 Houston, TX by Howard Gruenspecht, Deputy Administrator U.S. Energy Information Administration Independent Statistics & Analysis www.eia.gov
Historical oil prices (and EIA forecast through 2016) crude oil price price per barrel (real 2010 dollars) Prices shown are quarterly averages: dashed lines are EIA projections Sources: U.S. Energy Information Administration,…
Brent crude oil prices were relatively stable through the first half of 2014; increased oil supply and lower global economic growth expectations lowered prices from July 2014 to January 2015 dollars per barrel Source: EIA,…
Key takeaways Oil prices: EIAs forecast for Brent averages 61/b in 2015 and 70/b in 2016. The market-implied 95% confidence band for Brent (estimated from WTI futures and options prices) is extremely wide with a range from 40/b to 110/b…
Oil prices rise from mid-2015 through mid-2016 in EIAs forecast however, the market-implied confidence band is very wide WTI price dollars per barrel 150 125 100 75 Historical Spot Price 50 STEO Forecast NYMEX Futures Price 25…
Total U.S. crude production is forecast to decline between 2Q15 and 1Q16; output growth then resumes growth in 2016, reflecting EIAs price forecast U.S. crude oil production growth by area cumulative growth compared with 4Q14 (million…
EIAs latest DPR forecasts June oil production below the May level in the Bakken, Eagle Ford, and Niobrara regions Effects of low oil prices May 12, 2015 7
North American oil production growth slows with lower oil prices but remains the main driver of global production growth world crude oil and liquid fuels production growth million barrels per day 2.0 Forecast 1.5 1.0 0.5…
EIA forecasts global liquids consumption growth at 1.2 million bbl/d in 2015 and 1.3 million bbl/d in 2016 world liquid fuels consumption annual change million barrels per day million barrels per day 96 Change in U.S. consumption (right…
Various events could lead to changes in global supply or demand that could push future crude oil prices higher or lower than the forecast Event Oil demand growth surprises to the upside (economy- or price-driven) Key OPEC producers…
Govt deficits, high reliance on oil revenue, and asset coverage of govt spending are indicators of geopolitical stress exposure less risk more risk more risk less risk Source: EIA, International Monetary Fund (IMF),…
U.S. gasoline demand is forecast to increase 1.4% percent in 2015 reflecting a combination of factors year over year quarterly U.S. gasoline demand growth percent change 5% forecast 4% 3% 2% 1% 0% -1% -2% -3% -4% 2010 2011…
Average household energy expenditures fall by 15% in 2015, then increase somewhat in 2016 (based on EIA price forecast) household energy expenditures dollars 5,000 4,568 4,534 3,832 4,009 393 417 4,000 402 398 1,422 1,464 Natural…
Longer-term perspective Effects of low oil prices May 12, 2015 14
EIAs long-term price scenarios cover a wide range of potential prices Brent crude oil spot price 2013 dollars per barrel History 2013 Projections 250 High Oil Price 200 150 Reference 100 Low Oil Price 50 High Oil and Gas…
Lower oil prices, if sustained, have a significant impact on projected U.S. production Reference case Low price case million barrels per day million barrels per day History 2013 Projections History 2013 Projections 14 14 12 12…
Can OPEC cohere comparison of change in world liquid fuel balances for two 12-year historical periods with EIA projections for 2013-25 from AEO2015 (million barrels per day) Projected AEO 2014 Actual Reference & HOGR Cases 197385…
For more information U.S. Energy Information Administration home page www.eia.gov Annual Energy Outlook www.eia.gov/forecasts/aeo Short-Term Energy Outlook www.eia.gov/forecasts/steo International Energy Outlook…
Henry Hub spot prices are expected to average 2.93/million Btu in 2015 and 3.32/million Btu in 2016 Henry Hub spot price dollars per million Btu 7 6 5 4 3 Historical Spot Price 2 STEO Forecast 1 NYMEX Futures Price 95% NYMEX…
Natural gas production is expected to increase by 4.5 bcf/day in 2015 and by 1.3 bcf/day in 2016 U.S. natural gas production and imports annual change billion cubic feet per day billion cubic feet per day 82 9 80 8 78 7 76 6 74 5 72 4 70…
Industrial and power sectors drive natural gas consumption growth in the forecast natural gas consumption annual change billion cubic feet per day billion cubic feet per day 120 8 110 7 100 6 90 5 80 4 70 3 60 2 50 1 40 30 0…
EIAs latest DPR forecasts June natural gas production below the May level in the Bakken, Eagle Ford, and Niobrara regions Effects of low oil prices May 12, 2015 22
New condensate splitter projects in the United States Capacity Est. Cost2 Project State Completion Status (Mbbl/sd) (MM) Kinder Morgan - Galena Park 50 Texas 180 2015 under construction Kinder Morgan - Galena Park 50 Texas 180…
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