Ijeoma Agudosi/Agency Report
Continued growth in global production of petroleum and other liquids has outpaced consumption growth since August 2014, resulting in rising global liquids stocks.
Total global liquids inventories are estimated to have grown by 2.3 million barrels per day (b/d) through the first seven months of 2015, the highest level of inventory builds through July of any year since 1998.
EIA estimates global consumption of petroleum and other liquids grew by 1.1 million b/d in 2014, averaging 92.4 million b/d for the year.
Through July 2015, global liquids consumption has grown by an additional 1.2 million b/d while global production of petroleum and other liquids has been higher, growing by 2.3 million b/d in 2014, averaging 93.3 million b/d for the year, and increasing by an estimated additional 2.9 million b/d through July 2015.
Although the annual increases in global crude oil and liquids production have been similar, the sources of supply have been different.
In 2014, most global liquids production growth was from countries outside of the Organization of the Petroleum Exporting Countries (OPEC), particularly the United States, while production from OPEC actually fell.
In contrast, growth thus far in 2015 has come from both OPEC and non-OPEC countries.
Through the first seven months, EIA estimates that non-OPEC petroleum and other liquids production has grown by an average of 2.0 million b/d, while OPEC liquids production is estimated to have grown by 0.9 million b/d over the same period.
In the August Short-Term Energy Outlook (STEO), EIA forecasts that falling crude oil production in the United States in response to lower oil prices will help moderate oil inventory builds in the coming months, leading to slightly higher expected prices.
The pace of inventory accumulation is expected to slow from more than 2.0 million b/d currently to 1.5 million b/d in the fourth quarter of 2015, and to drop below a 1.0 million b/d build in 2016.
Expectations for a continuation in this trend should be reflected in increasing Brent crude oil spot prices, which are forecast in STEO to increase from an average of $51/b in the fourth quarter of this year to an average of $59/b in 2016.