Oil Demand Projections Doubled, Imports to Exceed 50% of Total Supplies

Strategic Insights -

Washington's Independent Petroleum Association of America (IPAA) has revised its 1994 U.S. oil demand projection, doubling the expected increase to 3.2%, or 550,000 b/d, reaching 17.75 million b/d. This significant jump will be entirely met by oil imports, which are forecasted to rise by 5.2% to 9 million b/d. The producer group has also revised downward its estimate of U.S. crude oil production for this year, projecting a 2.8% decline to 6.6 million b/d, the lowest domestic output in 35 years.

Key Takeaways:

  • The IPAA has increased its 1994 U.S. oil demand projection by 100% compared to last November's estimate, forecasting a 3.2% rise to 17.75 million b/d, entirely met by oil imports.
  • Oil imports are expected to rise by 5.2% to 9 million b/d in 1994, exceeding 50% of total U.S. supplies for the first time.
  • The producer group has revised downward its estimate of U.S. crude oil production for this year to 6.6 million b/d, a 2.8% decline from 1993 levels, marking the lowest domestic output in 35 years.
  • The downward revision reflects a decrease in new wells drilled and a lower number of active rotary drilling rigs.
  • The IPAA has also substantially upgraded its projection of U.S. natural gas demand, expecting a 2.6% gain to 20.7 Tcf in 1994.
  • Gas production is expected to rise 1% to 18.5 Tcf in 1994.
  • Gas use will be driven by cold weather, increased economic activity, and the growth of gas-fired cogeneration plants, offset by fuel-switching to residual fuel oil and growth of nuclear power.

Statistics:

  • 3.2% increase in U.S. oil demand in 1994 to 17.75 million b/d
  • 550,000 b/d rise in domestic oil demand, compared to 200,000 b/d in last November's projection
  • 9 million b/d oil imports in 1994, up 5.2% from 1993 levels
  • 50% of total U.S. supplies to be met by imports in 1994
  • 6.6 million b/d U.S. crude oil production in 1994, down 2.8% from 1993
  • 20.7 Tcf U.S. natural gas demand in 1994, up 2.6% from 1993
  • 18.5 Tcf U.S. gas production in 1994, up 1% from 1993

Sources:

  • "1994 U.S. Oil Demand to Rise Sharply, Imports to Exceed 50% of Total Supplies," IPAA (no date mentioned)
  • Supply and Demand Committee of the Independent Petroleum Association of America (no date mentioned)