According to the US Energy Information Administration (EIA), crude oil prices fell sharply in the fourth quarter of 2014 as robust global production exceeded demand. After reaching monthly peaks of US$112/bbl and US$105/bbl in June, crude oil benchmarks Brent and West Texas Intermediate (WTI) fell to US$62/bbl and US$59/bbl in December, respectively.
Brent prices fell below the five year average in early September and slipped well below the five year range in November and December. WTI prices have been below the five year average since early October and below the five year range since early November.
- Domestic crude oil production increased 1.2 million bpd in 2014, up 16% from 2013. At 8.6 million bpd, US production is at the highest level in nearly 30 years.
- The Brent-WTI spread averaged less than US$6/bbl, significantly lower than the 2011 – 2013 average of nearly US$15/bbl.
- Estimated global liquids production grew by 1.8 million bpd to total 92.0 million bpd in 2014, mainly reflecting non-OPEC production increases concentrated in North America.
- EIA estimates that global unplanned supply disruptions averaged 3.1 million bpd in 2014, 0.4 million bpd higher than the previous year. OPEC producers had the largest share of outages at 2.5 million bpd.
- EIA estimates that global liquid fuels production exceeded consumption in each of the four quarters of 2014. In the previous five years, production had not exceeded consumption for more than two consecutive quarters.
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