Cold winter conditions have hampered well-completion activity in the US, prompting the Energy Information Administration to revise downward its projections of US crude output for this year.
The EIA, in its March Short-Term Energy Outlook, said US crude production would average 8.39 million b/d in 2014, down from 8.42 million b/d in its February outlook. But the agency said it expects the weather effects to be temporary, and much of the production slowdown will be made up over the next few months.
Production in the Bakken, Eagle Ford and Permian regions will contribute to strong US growth through 2015, when the EIA projects that the US will produce 9.16 million b/d. That would put the US close to its all-time average high of 9.6 million b/d, achieved in 1970.
The EIA said it expects Bakken production to return to 1 million b/d in the first quarter of 2014, following winter-related slowdowns.
Production in the Eagle Ford formation in South Texas reached 1.3 million b/d in December 2013, the EIA said, while US federal Gulf of Mexico production averaged 1.3 million b/d, down slightly from 2012. But the EIA said it expects Gulf production to reach 1.4 million b/d in 2014 and 1.6 million b/d in 2015, as several projects come online.
With US refiners announcing expansion plans to process more domestic light sweet crude, the EIA projects that crude oil inputs to US refineries will increase from 15.31 million b/d in 2013 to 15.52 million b/d in 2014 and 15.61 million b/d in 2015. That would surpass the previous high of 15.48 million b/d, achieved in 2004, the EIA noted.
The surge in domestic production will cause US crude imports to decline to 25% of total liquid fuels consumption, which would be the lowest level since 1971, the EIA added.
Meanwhile, US liquid fuels demand is expected to remain flat in 2014, averaging 18.89 million b/d, before rising slightly to 18.99 million b/d in 2015.
"Motor gasoline consumption remains largely unchanged as the recent strong growth in highway travel slows and continued improvements in new-vehicle fuel economy boost overall fuel efficiency growth," the EIA said.
It added that the 2015 rise in consumption will be driven primarily by increased transportation demand for distillate fuel oil and industrial demand for hydrocarbon gas liquids.
