Crude Oil and Liquid Fuels Overview. The expected pace of global oil consumption growth for 2011 is slightly lower in this month's Outlook, while projected total supply in 2011 is higher, resulting in some easing of oil market tightness. Despite this easing, EIA continues to expect markets to rely on inventories to meet some consumption growth in 2011 and 2012. Oil consumption growth from countries outside of the Organization for Economic Cooperation and Development (OECD) is projected to outpace the growth in supply from producers that are not members of the Organization of the Petroleum Exporting Countries (OPEC), implying a need for OPEC producers to increase their output to balance the market in 2011 and 2012.
Oil prices continue to face upward price pressure due to supply uncertainty and downward price pressure because of lowering expectations of economic growth. Upside uncertainty to the crude oil price outlook remains as a result of ongoing unrest in oil-producing regions. Heightened turmoil in Syria, which produced an average 400 thousand bbl/d in 2010, and the potential for more sanctions on the country's energy sector is one source of risk to non-OPEC supply. At the same time, downside demand risks predominate, as fears persist about the rate of global economic recovery, contagion effects of the debt crisis in the European Union, and other fiscal issues facing national governments. On the supply side, there may be downward price pressure if Libya is able to ramp up oil production and exports sooner than anticipated.
Global Crude Oil and Liquid Fuels Consumption. EIA expects that world crude oil and liquid fuels consumption will continue growing from its record-high level of 87.1 million barrels per day (bbl/d) in 2010 and reach 88.4 million bbl/d on 2011 and 89.8 million bbl/d in 2012 (World Liquid Fuels Consumption Chart). Consumption in OECD countries is projected to decline in both 2011 and 2012, while China and other emerging economies account for all projected oil consumption growth through 2012.
Non-OPEC Supply. EIA projects that non-OPEC liquid fuels production will grow by 0.49 million bbl/d in 2011 and 0.85 million bbl/d to an average of 53.1 million bbl/d in 2012 (Non-OPEC Crude Oil and Liquid Fuels Production Growth Chart). The largest sources of expected growth in non-OPEC oil production over the forecast period are Brazil, Canada, China, Colombia, Kazakhstan, and the United States, with average annual growth in each country of over 100 thousand bbl/d. In contrast, Russian, Mexican, and North Sea production will be lower by the end of the forecast period.