Production cuts resulting from low oil prices could eliminate the growth in U.S. output over the next year and a half, according to a new analysis by financial services firm Raymond James. As FuelFix.com reports, the report concludes that barring any cuts by the Organization of the Petroleum Exporting Countries, U.S. expected annual production growth of 1.5 million barrels per day in 2014 would have to fall to near zero over the next year and a half to close the gap between supply and demand in the oil market.
The analysis comes on the heels of OPEC’s decision last week not to prop up oil prices by cutting production among its 12 members. If the cartel’s position holds until its meeting next year, it will largely be up to U.S. producers to slow production growth and bring oil markets back into balance, the report says.
The United States could be on pace to produce about 1.5 million more barrels per day in 2014 than it did in 2013, according to Raymond James’ projections. The growth accounts for about 90% of the global supply increase. In 2013, the U.S. pumped about 7.4 million barrels of crude from the ground each day, according to the U.S. Energy Information Administration.
At the same time, global oil demand growth has proven to be anemic as economies have cooled off in major emerging markets including China and India. Raymond James predicted oil demand would grow by 1.1 million barrels per day over the next few years, in line with predictions from the Paris-based International Energy Agency. Read the full story.
