The US Energy Information Agency released their monthly Short Term Energy Outlook report on May 10 with a positive outlook for the US oil and gas industry's future. European crude oil benchmark, Brent, averaged $42 per barrel of oil in April, which is a $3 per barrel increase over the previous month’s average. The US EIA’s current report forecasts Brent to average $41 per barrel in 2016 and $51 per barrel in 2017, which is $6 and $10 per barrel higher than last month’s report. NYMEX crude prices, or West Texas Intermediate, are expected to average somewhat less than Brent in 2016 and about the same in 2017.
According to the US EIA, US crude production is estimated to average around 8.6 million barrels per day (mb/d) in 2016 and 8.2 mb/d in 2017, which is a -8.5% and -4.7% decline from year to year. The report approximated US crude production was 0.1 mb/d less than March and 0.7 mb/d below April of last year, with a daily average of 9.0 mb/d for April of 2016.
The EIA estimates that US natural gas inventory will be the highest it’s been on record at the end of October 2016, with an inventory level of 4,158 Bcf. Additionally, natural gas inventory was 2,625 Bcf as of April 29, 2016, which is 49% higher than the same week last year.
The EIA also released their International Energy Outlook report, projecting the world’s energy consumption over the next several decades. The report attributes a 48% increase in global energy consumption over the next 30 years to rising incomes of developing Asian economies like China and India. Over the next 30 years, the EIA expects natural gas consumption to be the fastest growing fossil fuel, surpassing coal to become the second largest energy source behind liquids.
Subscribers can read the complete story in the May 12th, 2016 issue of the Rigs and Drilling Analytical Report. To subscribe, go here.