OPEC feels pinch from US‘Healthy growth’ from ND, TX and GOM cut into cartel’s market share Mike Ellerd Petroleum News Bakken
In its annual statistics bulletin released on July 18, the Organization of the Petroleum Exporting Countries, OPEC, indicated that global crude oil production averaged 72.84 million barrels per day in 2013, and that OPEC’s market share of the global output declined 2.5 percent from 2012, primarily due to increasing competition from the U.S.
OPEC member countries averaged 31.61 million bpd or 43.4 percent of the 72.84 million bpd produced in 2013. In 2012, OPEC member countries averaged 32.42 million bpd, which was 44.6 percent of total global output. Thus, not only did OPEC’s 2013 production decline by 2.5 percent, but its market share of global output fell by 1.2 percent (see table). OPEC, which is based in Vienna, consists of the following 12 member countries: Algeria, Angola, Ecuador, the Islamic Republic of Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.
According to OPEC’s monthly market report released on June 10, the increase in U.S. production has been supported by “continued healthy growth of tight oil from North Dakota and Texas” along with the “activated operation and new projects in the Gulf of Mexico.” OPEC said that over the last three years, crude oil production in North Dakota grew at an annual rate of 37 percent and in Texas at 28 percent compared to just 2 percent for remaining U.S. crude production. During that period, OPEC said, the combined share of total U.S. crude oil production from North Dakota and Texas increased from 26 percent to 48 percent.
“Oil and gas field activities in the U.S. continue to be centered on tight oil and shale formations onshore,” OPEC said in the July 10 monthly market report. “Growth in crude oil production from those resources, for example in Texas and North Dakota, spurred by technology and efficiency gains, increased from 12 percent of total US production in 2011 to approximately half of U.S. crude production in April 2014.”
Who produced what in 2013 Of the 72.84 million bpd global production in 2013, which was a weak 0.1 percent increase over 2012, non-OPEC countries produced 41.24 million bpd or 56.6 percent. Of those non-OPEC countries, members of the Organization for Economic Cooperation and Development, OECD, which includes the U.S., Canada, Australia, Japan, Korea and most of Europe, produced 14.45 million bpd or 19.8 percent of world-wide production. Countries that were formerly part of the Soviet Union, including Russia and Ukraine, produced 12.62 million bpd or 17.3 of global output.
The largest oil producer in 2013 was Russia at 10.15 million barrels per day, followed by Saudi Arabia at 9.64 million bpd and the U.S. at 7.44 million bpd. Also among the top 10 global oil producers in 2013 were, in order of production, China, Iran, Iraq, Kuwait, United Arab Emirates, Venezuela and Mexico (see chart).
Supply and Demand In terms of oil supply, which includes production, imports and refinery production, OPEC estimated average global oil supply at 90.15 million bpd for the first quarter and 90.16 million bpd for the second quarter with supplies averaging 90.66 million bpd in June. In comparison, OPEC estimates overall average 2013 global oil demand at 90.01 million bpd. Looking ahead, OPEC estimates that global oil demand will increase to an average of 91.13 million bpd in 2014 and to 92.35 million bpd in 2015.
Non-OPEC supply is expected to increase by 1.47 million bpd in 2014 to 55.65 million bpd at the end of 2014 and by 1.31 million bpd to 56.96 million bpd by the end of 2015. For 2014, OPEC estimates its natural gas liquids and non-conventional oil supplies to average 5.81 million bpd. With 2014 demand projected at 91.13 million bpd, non-OPEC supply at 55.65 million bpd and OPEC NGLs and non-conventionals at 5.81 million bpd, OPEC estimates demand for its crude oil in 2014 at 29.67 million bpd. That would be a decrease of 1.74 percent from OPEC’s average 2013 production and a decrease of 4.7 percent from its 2012 crude oil production.
For 2015, OPEC projects natural gas liquids and non-conventional oils production to average 6 million bpd, which combined with the 56.92 million bpd non-OPEC, contributes 62.96 million to 2015 supplies. With demand projected at 92.35 million bpd in 2015, OPEC takes the difference of 29.39 million bpd as the demand for its crude oil in 2015. That represents a 2.67 decrease from 2013 output and a 5.60 percent decrease from 2012 output.
So not only has OPEC seen a decline in its global market share in 2013, but the cartel is projecting less demand for its crude oil over the next two years.
Where’s the greatest demand? Crude oil demand in 2013 was highest in the U.S. at 18.90 million bpd, which was an increase of 1.9 percent over 2012. Second in oil demand behind the U.S. was China at 10.07 bpd, an increase of 3.4 percent over 2012. Japan had the third highest crude oil demand in 2013 at 4.54 bpd, although that was a 3.8 percent decline from 2012. India had the fourth highest oil demand in 2013 at 3.7 million bpd, a 1.3 percent increase over 2012, and Russia was fifth in oil demand at 3.44 million bpd, up 1.2 percent from 2012.
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