SAFE Releases Q3 Energy Security Fact Pack
Today, SAFE is releasing its third quarter update to the Energy Security Fact Pack, a powerful repository of the most recent trends affecting American energy security and the global oil market today. This most recent update features a spotlight on oil and gas production on federal lands, including offshore development, and the associated economic indicators, such as rig count and federal royalties. This quarter, SAFE’s Fact Pack examines oil’s rapid downward slide towards the $80-$90 dollar range. Against the growing backdrop of geopolitical turmoil around the world, including limited airstrikes against Islamic militants in Iraq and Syria, OPEC actually increased production by 0.6 million barrels per day (mbd) year-over-year (y-o-y) in Q3. This growth in output complemented budding domestic production, which increased 1 mbd over the same period. The recent glut in global crude oil production has opened new fissures within the cartel of oil-producing nations. In recent years, Saudi Arabia and some other OPEC member countries have reduced output in order to help maintain desired price levels (and price stability) during times of market oversupply. Thus far, they have chosen not to during the current slump, and some have even lowered their official selling price (OSPs) in an effort to maintain market share, inviting speculation of a price war within the cartel. This has prompted new questions about dynamics between OPEC member countries and the sustainability of higher-cost oil production across the globe. This edition of the Fact Pack offers key insight into Q3’s most significant developments:
- Domestic crude oil production increased by 1 mbd in Q3 2014 (y-o-y), roughly 14 percent. Inclusive of fuel ethanol and natural gas liquids (NGLs), total U.S. liquids production is more than 4.6 mbd higher than it was in 2008, making the country the world’s largest liquids producer.
- Global production grew 1.6 mbd (y-o-y) on the back of higher U.S. supply (+1.5 mbd y-o-y). OPEC (non-Saudi) supply was also positive in September for the first time in roughly two years.
- Global oil demand increased by approximately 1.2 mbd (y-o-y). Non-OECD countries accounted for the majority of the increase. With the exception of a 0.2 mbd decline in Q1 2012, global oil demand has risen steadily since late 2009, reaching 92.4 mbd in Q3.