US Oil Supply
In 2008, total domestic crude oil output is projected to average 5.15 million bbl/d, up slightly from the 2007 average of 5.10 million bbl/d. Production growth in the Lower-48 region is expected to more than offset declines in Alaskan output. In 2009, total production is projected to increase to 5.36 million bbl/d, due mostly to the Thunder Horse and Tahiti platforms coming on-stream in late 2008 and 2009, respectively. This projection includes an expectation of hurricane-induced outages of about 10 million barrels for the offshore region in 2008. Fuel ethanol production is projected to increase from an annual average of 430,000 bbl/d in 2007 to 590,000 bbl/d in 2008 and to 650,000 bbl/d in 2009.
US Oil Consumption
During the first 5 months of 2008, total petroleum consumption fell by an average of almost 900,000 bbl/d from the same period in 2007. During June and July, the year-over-year declines narrowed to just over 400,000 bbl/d. The year-over-year declines in consumption are not expected to be as large over the forecast period, with 2009 average total consumption about 120,000 bbl/d lower than the 2008 average.
Global Oil Supply
If new projects come online as now anticipated, total non-OPEC supply is projected to rise by about 510,000 bbl/d in the second half of 2008 and by 850,000 bbl/d in 2009 compared with year-earlier levels. This compares with a 330,000 bbl/d decline in non-OPEC supply recorded during the first half of 2008. Non-OPEC supply growth through 2009 is expected to be led by Brazil, the United States, and Azerbaijan.
OPEC crude oil production is expected to rise to 32.9 million bbl/d during the third quarter of 2008, up from 32.3 million bbl/d in the second quarter. The forecast assumes that Saudi Arabia will maintain its July 9.7 million bbl/d production level through the third quarter, representing a 400,000 bbl/d rise from second quarter levels. OPEC crude oil production is projected to drop to about 32.4 million bbl/d in the fourth quarter of 2008, and to decline to 31.6 million bbl/d in 2009. Lower crude production combined with planned increases in OPEC total liquids production capacity suggests OPEC surplus crude production capacity could increase from 1.2 million bbl/d currently to about 3.6 million bbl/d by the end of next year.
Global Oil Consumption
Preliminary data indicates that global consumption rose by roughly 500,000 barrels per day (bbl/d) during the first half of 2008 compared with year-earlier levels, as a 1.3-million bbl/d rise in consumption outside of the Organization for Economic Cooperation and Development (OECD) was partially countered by an 800,000 bbl/d drop in U.S. consumption compared with year-earlier levels. Total world oil consumption is expected to grow by a little over 1 million bbl/d during the second half of 2008 and by almost 1 million bbl/d in 2009 compared with year-earlier levels. The projection for 2009 consumption is about 460,000 bbl/d lower than last month’s assessment, reflecting lower expectations for consumption in the United States and other OECD countries.