US oil output stabilizing prices

The U.S. Energy Information Administration, or EIA, has commented that oil production growth in the United States contributed to the relative stability in global oil prices seen in 2013. As U.S. production climbed, with oil transportation infrastructure improvements easing the flow of oil from new shale oil plays in the Bakken, Permian basin and the Eagle Ford, and from Cushing Okla., in 2013 West Texas Intermediate spot prices climbed 4 percent to an average price of $98 per barrel. At the same time, North Sea Brent prices dropped 3 percent to $109 per barrel, EIA said.

“Brent prices came down under downward pressure as rising U.S light sweet crude oil production reduced the need for U.S. imports, thereby increasing supplies of Brent-quality crude oil available to the global market,” EIA said.

In 2013 U.S. domestic oil production reached its highest level in 24 years, increasing by 1 million barrels per day, an increase greater than the combined increases achieved by the rest of the world, and the largest observed production increase in U.S. history, EIA said. And, for several weeks, U.S. production exceeded imports, the first time this has happened in nearly two decades, the agency said.

At the same time China has overtaken the United States as the largest importer of crude oil. Unplanned oil supply disruptions around the world averaged 2.6 million barrels per day in 2013, with producers in the Organization of Petroleum Exporting Countries accounting for 1.8 million barrels of this figure. In 2013 higher U.S. production coupled with some elevated Saudi Arabian production stabilized prices by offsetting outages. OPEC liquid fuel production dropped by 0.9 million barrels per day, while non-OPEC production grew by more than 1.4 million barrels per day.

—Alan Bailey