U.S.: THE LARGEST PRODUCER
The United States remained the world's top producer of petroleum and natural gas hydrocarbons in 2014, according to U.S. Energy Information Administration estimates. U.S. hydrocarbon production continues to exceed that of both Russia and Saudi Arabia, the second- and third-largest producers, respectively. For the United States and Russia, total petroleum and natural gas hydrocarbon production, in energy content terms, is almost evenly split between petroleum and natural gas. Saudi Arabia's production, on the other hand, heavily favors petroleum.
Since 2008, U.S. petroleum production has increased by more than 11 quadrillion British thermal units (Btu), with dramatic growth in Texas and North Dakota. Despite the 50% decline in crude oil prices that occurred in the second half of last year, U.S. petroleum production still increased by 3 quadrillion Btu (1.6 million barrels per day) in 2014. Natural gas production—largely from the eastern United States—increased by 5 quadrillion Btu (13.9 billion cubic feet per day) over the past five years. Combined hydrocarbon output in Russia increased by 3 quadrillion Btu and in Saudi Arabia by 4 quadrillion Btu over the past five years.
While U.S. hydrocarbon production over the past several years is directly attributed to its success at exploiting tight oil formations and shale gas, other key factors also acted to keep hydrocarbon production from increasing in Russia and Saudi Arabia in 2014. Although Russian petroleum production continued to increase, natural gas production declined because weak European economic growth and a warm 2013-14 winter reduced demand in Russia's primary market for gas exports. While total petroleum and natural gas hydrocarbon production estimates for the United States and Russia in 2011 were roughly equivalent, by 2014 U.S. production exceeded Russian production by almost 12 quadrillion Btu.
In contrast to its past actions to raise or lower oil production levels to balance global oil markets, Saudi Arabia did not cut its production in the fall of 2014 despite falling oil prices and growing global inventories of oil as supply exceeded demand. As a result, Saudi Arabia's total petroleum and natural gas hydrocarbon production was nearly unchanged from 2013. With the increase in U.S. production, the United States produced nearly twice the petroleum and natural gas hydrocarbons as produced by Saudi Arabia in 2014.
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REUTERS - Brent crude futures LCOc1 were down 72 cents at $61.49 per barrel at 1020 GMT, having fallen by 1.5 percent on Tuesday, its largest one-day drop in a month. U.S. West Texas Intermediate (WTI) crude CLc1 was at $55.12 per barrel, down 58 cents.
BLOOMBERG - Prices dropped during the session as the International Energy Agency said the recent recovery in oil prices, coupled with milder-than-normal winter weather, is slowing demand growth. The worsening outlook for consumption dampened some of the enthusiasm that OPEC and its allies will extend supply curbs.
Global energy needs rise more slowly than in the past but still expand by 30% between today and 2040. This is the equivalent of adding another China and India to today’s global demand.
Product exports have grown significantly over the past several years and are expected to continue to grow as Russian refineries add capacity to produce more high-quality products.