12 March 2013 18:02 [Source: ICIS news]
WASHINGTON (ICIS)--US crude oil production exceeded an average level of 7m bbls/day in November and December last year, the Department of Energy (DOE) said on Tuesday, marking the highest pace of domestic oil output in 20 years.
In its monthly short-term energy outlook (STEO), the department’s Energy Information Administration (EIA) also said that US oil production is expected to see continued growth, rising to an average of 7.3m bbls/day this year and nearing 8m bbls/day on average in 2014.
The report noted that the price of US benchmark West Texas Intermediate (WTI) crude oil in February was $99/bbl, fully $20/bbl cheaper than Brent crude, which rose to $119/bbl in the same month.
That WTI discount to Brent crude will average $16/bbl this year and then narrow further to $9/bbl in 2014 “as planned new pipeline capacity lowers the cost of moving mid-continent crude oil to the Gulf Coast refining centres”, the administration said.
In natural gas, the report said that US working inventories were at an estimated 2.08 trillion cubic feet (tcf) at the end of February, about 0.36 tcf below the level seen at the same time last year but 0.27 tcf higher than the five-year average during 2008-2012.
EIA said that the average Henry Hub spot price for US natural gas averaged $2.75/MMBtu in 2012 and will likely climb to an average $3.41/MMBtu for 2013 and then to $3.63/MMBtu on average in 2014.
Those natgas price gains will develop despite increasing domestic US gas production, the administration said, as demand for residential and commercial consumption increases along with growth in gas exports to Mexico.
Projected US natural gas marketed production increases from 69.1bn cubic feet per day (bcf/d) in 2012 to some 69.6 bcf/d this year, the report said.
Natural gas is the principal feedstock for US petrochemicals production, and it is a key energy source for downstream chemical makers and the broader US manufacturing industry.
($1 = €0.77)
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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