The US posted a second consecutive year of record oil production growth in 2013 with its surging shale industry balancing out supply disruptions to underpin an unprecedented period of stable global oil prices, BP said Monday.
US output grew by 1.1 million b/d in 2013, up from 1 million b/d growth the year before, to reach 10 million b/d, the highest level since 1986, BP said in its latest annual statistical review.
The US' tight, light oil revolution continues to gather momentum and the country's production growth was again the biggest annual increase in the world and in the country's history, BP said.
The US oil supply estimate includes crude, shale oil, oil sands and natural gas liquids but excludes biofuels, which when added to the total, are widely believed to place the US as the world's biggest liquids producer above Saudi Arabia and Russia.
Overall, global oil production rose by 560,000 b/d or, 0.6%, to 86.8 million b/d last year, BP said. The US accounted for nearly all of the non-OPEC oil output increase of 1.2 million b/d last year to reach a record 50 million b/d.
But global oil production alone did not keep pace with the growth in global oil consumption in 2013, BP said. Global oil consumption grew by 1.4 million b/d or 1.4% -- just above the historical average -- to total 91.33 million b/d, BP said.
The US saw its own oil demand surge by 400,000 b/d last year, the largest single increment to global oil consumption that year and outpacing Chinese growth for the first time since 1999, BP said.
While China's oil demand grew 3.8% last year to 10.76 million b/d, a slowdown in the country's economic growth saw oil demand in China rise 390,000 b/d.
Globally, energy demand accelerated slightly to grow by 2.3% last year, slightly below the historical average, reflecting the continued weakness of the global economy, BP said.
Oil remains the world's leading fuel, BP said, with 33% of global energy consumption, but it lost market share to gas and other rivals for the 14th consecutive year. At the end of 2013, oil's share of the global energy market had slipped to the lowest level since BP's annual review began in 1965.
PRICE STABILITY
BP said the soaring US output remained a key factor in keeping oil prices from rising sharply last year, following a further period of oil supply disruptions mainly in Libya, Nigeria and the Middle East.
Oil prices were "extremely stable" last year, with oil price volatility the lowest since global oil prices become deregulated in the early 1970s, BP chief economist Christof Ruhl said.
Ruhl estimated that the world had seen a cumulative 3 million b/d in supply disruptions since the start of the 2011 Arab uprising, a similar figure to the incremental volumes of US production since then.
"The answer to this puzzle is that you have an almost perfect match between these outages in the Middle East and North Africa and the supply increase in the US output," Christof told reporters. "It's really just a coincidence, but they have perfectly matched...canceling each other out."
Dated Brent averaged $108.66/barrel in 2013, a decline of $3.01/b from the 2012 level, BP said.
Looking ahead, however, Christof recognized that oil price stability is under threat should the volumes and timing of US supply growth and/or supply disruptions begin to change.
"It means that they won't last forever and at some point the market will fall off a cliff on one side or the other," he said.
RESERVES GROWTH
BP's widely respected energy review shows that global oil reserves grew in 2013 to end the year at 1.688 trillion barrels, sufficient to support current global production levels for another 53.3 years. The figure was 1.1% higher than in BP's 2012 reserves estimated a year ago but little changed from a revised total of 1.687 trillion barrels for 2012 in the current report.
Most of the shale oil revolution has yet to feed through to BP's proven reserves figures, however, as they need to progress from being classified as being technically recoverable to economically recoverable.
Downstream, BP said global refinery crude runs increased by a below-average 390,000 b/d, or 0.5%, last year with non-OECD countries accounting for all of the net increase, rising by 730,000 b/d.
OECD refinery throughputs fell by 340,000 b/d, the seventh decline in the past nine years despite an increase of 320,000 b/d in US refinery runs, as the US continued to ramp up net product exports, BP said.
BP said global oil trade in 2013 grew by 2.1% or 1.2 million b/d, with import growth in Europe and emerging economies more than offsetting declines in the US and Japan.
Global biofuels production grew by a below-average 80,000 b/d of oil equivalent, or 6.1%, driven by increases in the two largest producers, Brazil and the US.
