Global energy markets

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Stanley Perkins
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1 For Woodrow Wilson Center Global Energy Forum September 21, 215 Washington, DC by Adam Sieminski, Administrator U.S. Energy Information Administration U.S. Energy Information Administration Independent Statistics & Analysis

2 Short-term outlook September 21, 215 2

3 The U.S. has experienced a rapid increase in natural gas and oil production from shale and other tight resources Eagle 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 (PA,WV,OH & NY) Woodford (OK) Granite Wash (OK & TX) Austin Chalk (LA & TX) Monterey (CA) U.S. tight oil production million barrels of oil per day U.S. dry shale gas production billion cubic feet per day Marcellus (PA,WV,OH & NY) 45 Haynesville (LA & TX) 4 Eagle Ford (TX) Fayetteville (AR) 35 Barnett (TX) 3 Woodford (OK) 25 Bakken (ND) Antrim (MI, IN, & OH) 2 Utica (OH, PA & WV) 15 Rest of US 'shale' 1 5 Sources: EIA derived from state administrative data collected by DrillingInfo Inc. Data are through August 215 and represent EIA s official tight oil & shale gas estimates, but are not survey data. State abbreviations indicate primary state(s). September 21, 215 3

4 Production growth in top U.S. crude producing regions (Permian, Bakken, Niobrara, and Eagle Ford) reverses in early 215 monthly percent change three month rolling average 4.% 3.% 2.% 1.%.% -1.% -2.% Jan 212 Jan 213 Jan 214 Jan 215 Source: Energy Information Administration, Drilling Productivity Report, September 215 (chart extends to October 215) September 21, 215 4

5 Forecasts for 216 global demand have increased while supply forecasts have decreased 216 year-over-year supply and demand growth by STEO forecast month million barrels per day demand growth supply growth. Jan Feb Mar Apr May Jun Jul Aug Sep STEO Forecast Month Source: Energy Information Administration, Short-Term Energy Outlook September 21, 215 5

6 Forecast for 216 OPEC supply have risen on the Iran deal, while non-opec forecasts have declined, driven by lower U.S. growth 216 year-over-year supply growth by STEO forecast month million barrels per day OPEC non-crude liquids supply growth 216 non-opec supply growth OPEC crude supply growth Jan Feb Mar Apr May Jun Jul Aug Sep STEO Forecast Month Source: Energy Information Administration, Short-Term Energy Outlook September 21, 215 6

7 Forecast OECD demand growth for 216 has been revised higher 216 year-over-year demand growth by STEO forecast month million barrels per day non-oecd consumption growth OECD consumption growth -.25 Jan Feb Mar Apr May Jun Jul Aug Sep STEO Forecast Month Source: Energy Information Administration, Short-Term Energy Outlook September 21, 215 7

8 OPEC surplus production capacity in 215 is lowest since 28 OPEC surplus crude oil production capacity million barrels per day 6 Forecast Note: Shaded area represents average (2.2 million barrels per day). Source: Energy Information Administration, Short-Term Energy Outlook, September 215 September 21, 215 8

9 OECD oil inventories are very high on a days of supply basis and are projected to continue increasing OECD commercial oil inventories days of supply August STEO January STEO Forecast 52 = 5 Jan 211 Jan 212 Jan 213 Jan 214 Jan 215 Jan 216 Source: Energy Information Administration, Short-Term Energy Outlook Note: Colored band around oil stocks days of supply represents the range between the minimum and maximum from Jan Dec September 21, 215 9

10 Iranian crude oil production is expected to begin increasing in the second quarter of 216, supply out of inventory will be sold before that Iranian crude oil production million barrels per day U.S. imposes sanctions on Iran's Central Bank Joint Plan of Action established adoption* EU import ban in effect and sanctions on shipping insurance in Iran's oil sector enacted Joint Comprehensive Plan of Action released implementation* Forecast.5. Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Source: Energy Information Administration *EIA s assessment September 21, 215 1

11 Oil supply and demand begin to rebalance in 216 World supply and demand Implied stock change million barrels per day (MMb/d) million barrels per day Implied stock change and balance (right axis) World production (left axis) World consumption (left axis) Q1 211-Q1 212-Q1 213-Q1 214-Q1 215-Q1 216-Q1-3 Source: EIA, Short-Term Energy Outlook, September 215 September 21,

12 For oil prices, the market-implied confidence band is very wide WTI price dollars per barrel Historical spot price STEO forecast Nymex futures price Current 95% NYMEX futures price confidence interval June % NYMEX futures price confidence interval Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Source: EIA, Short-Term Energy Outlook, July 215 September 21,

13 Long-term outlook for the United States September 21,

14 U.S. crude oil production: Supply rises above previous historical highs before 22 in all AEO215 cases, with a range of longer-term outcomes dependent on prices, resources and technology U.S. crude oil production million barrels per day (MMb/d) 2 History Reference High Oil and Gas Resource Low Oil Price 15 1 U.S. maximum production level of 9.6 million barrels per day in Tight oil Lower 48 offshore Other lower 48 onshore Alaska Source: EIA, Annual Energy Outlook 215 September 21,

15 U.S. natural gas trade: Projected U.S. natural gas trade reflects the spread between domestic natural gas prices and world energy prices, along with resource outcomes U.S. natural gas imports and exports trillion cubic feet History billion cubic feet per day 213 Projections Lower 48 states LNG exports Alaska LNG exports Pipeline exports to Mexico Pipeline exports to Canada Pipeline imports from Canada -1 High Oil and Gas LNG imports Reference Low Oil Price Resource Source: EIA, Annual Energy Outlook 215 September 21,

16 Global long-term outlook September 21,

17 Renewable energy and nuclear power are the fastest growing source of energy consumption world energy consumption by fuel quadrillion Btu History 25 2 liquids (including biofuels) 21 34% 15 28% natural gas 15% 1 22% renewables (excluding biofuels) 11% 5 7% nuclear 5% Source: EIA, International Energy Outlook 213 coal Projections 28% 27% 23% share of world total September 21,

18 World coal production billion short tons world total other non-oecd Asia Australia India United States 4 China Note: Indonesia accounted for 72 percent of the total coal production in Other non-oecd Asia in 21, rising from 52 percent in 2. Throughout the projection period, Indonesia continues dominating the region's coal production. Source: EIA, International Energy Outlook 213, Reference case September 21,

19 Non-OPEC petroleum and other liquids production million barrels per day (MMb/d) rest of non-oecd Brazil China Russia rest of OECD Canada United States Source: EIA, International Energy Outlook 213, Reference case September 21,

20 World net hydropower and other renewable electricity generation trillion killowatthours rest of non-oecd India Brazil China rest of OECD Canada United States Source: EIA, International Energy Outlook 213, Reference case September 21, 215 2

21 World net nuclear electricity generation trillion killowatthours 6 5 China rest of world India Russia OECD Europe other Asia 1 Japan United States Source: EIA, International Energy Outlook 213, Reference case September 21,

22 World natural gas production trillion cubic feet rest of non-oecd China MENA Russia rest of OECD Canada United States Source: EIA, International Energy Outlook 213, Reference case Note: The MENA region consists of the Middle East and North Africa countries September 21,

23 For more information U.S. Energy Information Administration home page Annual Energy Outlook Short-Term Energy Outlook International Energy Outlook Monthly Energy Review Today in Energy State Energy Profiles Drilling Productivity Report International Energy Portal September 21,

Energy Markets. U.S. Energy Information Administration. for Center on Global Energy Policy, Columbia University November 20, 2015 New York, New York

Energy Markets. U.S. Energy Information Administration. for Center on Global Energy Policy, Columbia University November 20, 2015 New York, New York Energy Markets for Center on Global Energy Policy, Columbia University New York, New York by Adam Sieminski, Administrator U.S. Energy Information Administration U.S. Energy Information Administration