Lower oil prices and the energy outlook For

Lower oil prices and the energy outlook For Money Marketeers June 2015 | New York, NY By Adam Sieminski U. S. Energy Information Administration Independent Statistics & Analysis www. eia. gov

For oil prices, the market-implied confidence band is very wide WTI price dollars per barrel 150 125 100 75 50 Historical Spot Price STEO Forecast NYMEX Futures Price 25 0 Current 95% NYMEX futures price confidence interval June 2014 95% NYMEX futures price confidence interval янв апр июл окт 2013 янв апр июл окт 2014 янв апр июл окт 2015 янв апр июл окт 2016 Source: EIA, Short-Term Energy Outlook, June 2015 Lower oil prices and the energy outlook June 2015 2

Production growth in top crude producing regions (Permian, Bakken, Niobrara, and Eagle Ford) reverses in early 2015 monthly percent change three month rolling average 4, 0% 3, 0% 2, 0% 1, 0% 0, 0% -1, 0% -2, 0% янв 2012 янв 2013 янв 2014 янв 2015 Source: EIA, DPR, June 2015 Lower oil prices and the energy outlook June 2015 3

North American oil production growth slows with lower oil prices but remains the main driver of global production growth world crude oil and liquid fuels production growth million barrels per day 2, 0 1, 5 1, 0 0, 5 F 0, 0 -0, 5 2014 OPEC countries Russia and Caspian Sea North Sea 2015 2016 North America Latin America Other Non-OPEC Source: EIA, Short-Term Energy Outlook, June 2015 Lower oil prices and the energy outlook June 2015 4

World liquid fuels consumption picks up million barrels per day 1, 0 0, 8 0, 6 0, 4 0, 2 0, 0 F* -0, 2 -0, 4 -0, 6 2014 OECD* 2015 Non-OECD Asia Former Soviet Union 2016 Other Source: EIA, Short-Term Energy Outlook, June 2015 Lower oil prices and the energy outlook June 2015 5

Surprises in liquid fuel demand to the upside are rare world liquid fuels consumption million barrels per day 96 94 92 annual change million barrels per day 8 Forecast Total world consumption (left axis) 7 Change in U. S. consumption (right axis) 6 Change in China consumption (right axis) 90 5 88 4 86 3 84 2 82 1 80 0 78 -1 76 -2 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: EIA, Short-Term Energy Outlook, June 2015 Lower oil prices and the energy outlook June 2015 6

Oil supply and demand rebalance by late 2016 million barrels per day 98 MMbbl/d 6 Forecast Implied stock change and balance (right axis) 96 World production (left axis) 94 World consumption (left axis) 5 4 92 3 90 2 88 1 86 0 84 82 -1 80 -2 78 2010 -Q 1 -3 2011 -Q 1 2012 -Q 1 2013 -Q 1 2014 -Q 1 2015 -Q 1 2016 -Q 1 Source: EIA, Short-Term Energy Outlook, June 2015 Lower oil prices and the energy outlook June 2015 7

OECD commercial crude oil stocks remain high days of supply 70 Forecast 65 60 55 50 45 янв 2010 янв 2011 янв 2012 янв 2013 янв 2014 янв 2015 янв 2016 Source: EIA, Short-Term Energy Outlook, June 2015 Lower oil prices and the energy outlook June 2015 8

OPEC surplus crude oil production capacity remains moderate to low million barrels per day 6 Note: 5 Shaded area represents 2004 -2014 average (2. 2 MMb/d) 4 3 2 F 1 . 0 6. 19 0 5 0: 00 6. 19 : 0 0 05 28 0: . 0 00 6. 19 : 0 0 0 29 5 0: . 0 00 6. 19 : 0 0 05 30 0: . 0 00 6. 19 : 0 01 5 0: . 0 00 7. 19 : 0 0 05 02 0: . 0 00 7. 19 : 0 0 05 03 0. 0 : 0 7. 0: 19 00 0 04 5 0: . 0 00 7. 19 : 0 0 05 05 0. 0 : 0 7. 0: 19 00 05 06 0: . 0 00 7. 19 : 0 0 05 07 0. 0 : 0 7. 0: 19 00 05 08 0: . 0 00 7. 19 : 0 0 05 0: 00 : 0 0 0 27 26 Source: EIA, Short-Term Energy Outlook, June 2015 Lower oil prices and the energy outlook June 2015 9

Long-term considerations Lower oil prices and the energy outlook June 2015 10

World crude oil price projection is lower in the AEO 2015 Reference case than in AEO 2014, particularly in the near term Brent crude oil spot price 2013 dollars per barrel History 160 Projections 2013 AEO 2014 120 AEO 2015 80 40 0 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 Source: EIA, Annual Energy Outlook 2015 Reference case and Annual Energy Outlook 2014 Reference case Lower oil prices and the energy outlook June 2015 11

All of the growth in liquid fuels consumption occurs in the emerging non-OECD (million barrels per day) petroleum and other liquid fuels consumption, 1990 -2040 million barrels per day history 90 projections 2010 Non-OECD 60 OECD 30 0 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 Source: EIA, International Energy Outlook 2014 Lower oil prices and the energy outlook June 2015 12

Most significant contributors to non-OPEC crude and lease condensate production: Canada, Brazil, U. S. , Kazakhstan, Russia non-OPEC crude and lease condensate production, Reference case million barrels per day 24 2010 2025 2040 18 12 6 0 Canada United States Mexico Brazil Kazakhstan Russia Other Source: EIA, International Energy Outlook 2014 Lower oil prices and the energy outlook June 2015 13

Reductions in energy intensity largely offset impact of GDP growth, leading to slow projected growth in energy use U. S. primary energy consumption quadrillion Btu History 120 100 Projections 2025 2013 2040 Renewables (excluding liquid biofuels) 80 Coal 40 20 0 1980 27% 8% 9% 10% 18% 19% 18% 8% Natural gas 60 Nuclear Liquid biofuels 1985 1990 1995 2000 1% 1% 2005 2010 1% 35% 36% Petroleum and other liquids 29% 27% 2015 2020 2025 33% 2030 2035 2040 Source: EIA, Annual Energy Outlook 2015 Reference case Lower oil prices and the energy outlook June 2015 14

In the transportation sector, motor gasoline use declines; diesel fuel, jet fuel, and natural gas use all grow transportation energy consumption by fuel quadrillion Btu History 30 Projections 2013 2040 2030 25 24% 20 Diesel 10% Other* Jet fuel 3% 4% 15 31% 1% 13% CNG/LNG 14% 4% Ethanol 2% 5% 3% 3% 10 5 0 1990 Motor gasoline 58% 1995 2000 2005 2010 2015 Source: EIA, Annual Energy Outlook 2015 Reference case Lower oil prices and the energy outlook June 2015 2020 44% 48% 2025 2030 2035 2040 *Includes aviation gasoline, propane, residual fuel oil, lubricants, electricity, and liquid hydrogen 15

U. S. crude oil production rises above previous historical highs before 2020 in all AEO 2015 cases, with a range of longer-term outcomes U. S. crude oil production million barrels per day History 2013 20 High Oil and Gas Resource Reference Low Oil Price 15 U. S. maximum production level of 9. 6 million barrels per day in 1970 10 Tight oil 5 Lower 48 offshore Other lower 48 onshore 0 1990 Alaska 2000 2010 2020 2030 2040 Source: EIA, Annual Energy Outlook 2015 Lower oil prices and the energy outlook June 2015 16

Projected U. S. natural gas exports reflect the spread between domestic natural gas prices and world energy prices U. S. natural gas imports and exports trillion cubic feet 16 billion cubic feet per day History 2013 Projections 2013 Lower 48 states LNG exports 12 40 30 Alaska LNG exports 8 Pipeline exports to Mexico 4 20 10 0 0 Pipeline imports from Canada Pipeline exports to Canada -4 LNG imports -8 2000 2010 High Oil and Gas Resource Reference 2020 2030 2040 -10 Low Oil Price 2020 2030 -20 2040 Source: EIA, Annual Energy Outlook 2015 Lower oil prices and the energy outlook June 2015 17

U. S. crude oil supply and disposition change, 2025 v. 2013 thousand barrels per day 8 000 source use 7 000 exports 6 000 hydroskimmers 5 000 4 000 stabilizers source use splitters refinery runs 3 000 declining imports 2 000 production 1 000 0 Low crude production case Crude exports restricted High crude production case Crude exports unrestricted Crude exports restricted Source: U. S. Energy Information Administration, based on Turner, Mason and Company Lower oil prices and the energy outlook June 2015 18

EIA is publishing a series of reports on U. S. crude exports Report Publish date U. S. crude oil production forecast—analysis of crude types May 2014 www. eia. gov/analysis/petroleum/crudetypes/ What drives U. S. gasoline prices www. eia. gov/analysis/studies/gasoline/ U. S crude oil import tracking tool www. eia. gov/beta/petroleum/imports/browser/ Technical options for processing additional light tight oil volumes within the United States October 2014 November 2014 April 2015 www. eia. gov/analysis/studies/petroleum/lto/ Implications of increasing light tight oil production for U. S. refining (Turner Mason) April 2015 www. eia. gov/analysis/studies/petroleum/morelto/ U. S. crude oil production to 2025: Updated projection of crude types May 2015 http: //www. eia. gov/analysis/petroleum/crudetypes/ Effects of relaxing U. S. crude export restrictions Lower oil prices and the energy outlook June 2015 19

For more information U. S. Energy Information Administration home page | www. eia. gov Annual Energy Outlook | www. eia. gov/aeo Short-Term Energy Outlook | www. eia. gov/steo International Energy Outlook | www. eia. gov/ieo Monthly Energy Review | www. eia. gov/mer Today in Energy | www. eia. gov/todayinenergy State Energy Profiles | www. eia. gov/state Drilling Productivity Report | www. eia. gov/petroleum/drilling/ International Energy Portal | www. eia. gov/beta/international/? src=home-b 1 Lower oil prices and the energy outlook June 2015 20