Boston, MA -- (SBWIRE) -- 08/21/2013 -- Crude oil production in the United States has surpassed the 7mn b/d mark and we forecast that it will reach 7.2mn b/d in 2013. We believe that the consumption patterns in the US have gone through a structural shift over the past four years towards much greater fuel economy and efficiency. We forecast that oil consumption growth in the US will stagnate and over the longer end of our forecast actually begin a decline.

The main driver of this trend will be the reduction in the growth rates of gasoline consumption. On the natural gas front we anticipate that more liquefied natural gas (LNG) export projects will be approved in the coming months following the approval of the Freeport LNG exports to non-FTA countries. Consumption surged in the first three months of the year during snowstorm Nemo in the Northeast and we forecast annual average growth of 2% for 2013 to 743bcm.For production we forecast growth of 2.8% and reaching 698bcm.

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The main trends and developments we highlight in the US oil and gas sector are:

- Our US liquids production forecasts err on the side of caution, seeing a moderation in liquids production growth in the coming years, as base effects subside. We do note risks to the upside, however, with hydraulic fracturing applied to more and more formations and unlocking new resources.
- According to our forecasts, the boom in US unconventional liquids production is set to combine with higher output from the Gulf of Mexico (GoM) to push total liquids supply (crude oil, natural gas liquids, other liquids and refinery gains) to 12.1mn barrels per day (b/d) in 2013. By 2016, we anticipate that total liquids output will have hit 13.3mn b/d, compared to our previous forecast of 12.6mn b/d.
- Oil demand growth is set to remain muted despite the slow recovery in the macro-economy (BMI's latest forecasts point to average real GDP growth of 2.1% in 2013). We forecast average annual growth of oil consumption to be -0.09% between 2013 and 2022. This is a change to our previous forecast of 0.3%. Demand growth will remain below trend over the course of the forecast period (to 2022) as the US energy market reduces its energy intensity and energy efficiency increases, which is in turn reflected in less demand, especially for gasoline and diesel (distillate fuel oil).

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