Comments: Supply/Demand Trends

Abstract

Editor's column Global oil production, consumption, and prices have remained largely stable in recent years, but several trends in the world supply/demand balance are evident in BP’s Statistical Review of World Energy 2014. The review, released in June, offers a snapshot of the global energy picture in 2013 along with historical data to put the information into perspective. The annual review contains country- by-country data on oil and gas production and consumption. The report shows the continuation of several trends that have begun in the past few years: tremendous oil production growth in the United States, the continued decline of oil in overall energy market share, increases in oil supply and demand below historical averages, and the rise of coal in the energy mix. The US “shale revolution” has not only transformed the country’s short- to medium- term outlook, reversing years of oil production decline, but also is having a significant impact beyond North America as well. US oil production in 2013 rose by 1.1 million BOPD, one of the highest year-on-year increases in history, according to the review. US oil production now exceeds 10 million BOPD, the country’s highest level since 1986. The fastest demand growth last year was also in the US, as consumption grew by 400,000 BOPD. Growth was led by the industrial sector, indicating continued recovery from the 2008 global financial crisis. US demand growth outpaced China’s for the first time in 1999. China’s energy demand growth still hit 4.7%, but lagged its 10-year average of 8.6%. The price of oil is at its most stable since 1970, as the large production increases in the US have offset supply declines in the Middle East/North Africa region. A cumulative 3 million bbl has been lost “since the start of the 2011 Arab uprising,” according to the report, but US output has grown by similar amounts. The price of Brent averaged USD 108.66/bbl in 2013, a slight decline from the year before, and the third straight year that the oil price has exceeded USD 100/bbl.