For decades, the United States has been a net energy consumer, using more energy than it produces. However, a sharp increase in oil and gas production after the shale boom and the continuing revolution of renewable energy have helped to change the energy trajectory over the past 15 years. And now the US Energy Information Administration (EIA) has reported that energy production in the US has exceeded consumption by record amounts by 2023.
US energy production grew 4% to nearly 103 quadrillion British thermal units (quads) in 2023, a record for the country, according to the EIA. In contrast, energy use fell 1% to 94 quads in the same period, meaning production exceeded consumption by 9 quads, the widest margin since 1949.
Dry natural gas production has increased by 4% in 2023 and 58% since 2013, while crude oil production has increased by 9% since 2022 and 69% since 2013. Meanwhile, renewable energy production increased by 1% compared to the previous year and by 28 % since 2013 and reached eight quads of energy. Solar generation recorded an impressive 15% year-on-year growth in 2023, while wind generation fell by 2%.
In contrast, US energy consumption fell 1%, largely due to a 17% drop in coal consumption. Demand for coal has been declining for years, reaching its lowest level in more than a century, largely thanks to its diminishing role in generating electricity due to its high carbon footprint.
Related article: US oil and gas drilling activity drops sharply
“Natural gas production continues to rise despite low prices because natural gas is produced as a byproduct of crude oil production. This is especially true in the Permian Basin, which accounts for nearly half of US crude oil production.” said Chris Higginbotham, EIA spokesman.
Source: US Energy Information Administration
The rise in oil prices resumes
The rise in oil prices, which had reversed course in recent weeks due to concerns about demand, is on the rise again. The Brent price rose to $86.39 a barrel. barrel in Friday’s intraday session from $77.52 on June 4, while WTI rose from $73.25 a barrel. barrel to 91. $58, with oil demand exceeding expectations. According to commodity analysts at Standard Chartered, global oil demand in April averaged 101.77 million barrels per day (mb/d), or 470 thousand barrels per day more than previous forecasts. StanChart reiterated its forecast that oil demand will hit a record high in June, with the demand projection for May revised up by 0.2 mb/d to reach 103.3 mb/d, while the June projection was revised up by 0.3 mb /d to reach 104.1 mb/dd
Meanwhile, the sharp rise in natural gas that began in late April appears to be pausing.
European natural gas futures trade in a narrow range around €35 per megawatt-hours as traders weigh significant inventory levels against pre-delivery occupancies. The long streak of EU gas stocks building below the five-year benchmark continues, with stocks falling behind the five-year average on 57 of the last 62 days. According to the latest data from Gas Infrastructure Europe (GIE), inventories stood at 85.25 billion cubic meters (bcm) on June 16, down 0.06 bcm from a year earlier and 12.93 bcm above the five-year average. The weekly build was 1.75 bcm, 1 bcm below the five-year average. The move away from the extreme surplus combined with concerns over the viability of remaining Russian flows to the EU helped support Dutch Title Transfer Facility (TTF) rates for the following month. Gas prices in Europe have remained within a range of 33 to 36 euros per megawatt hour (MWh) in 19 of the last 20 trading days.
US natural gas futures fell below $2.61/MMBtu during Friday’s intraday session following the EIA Stock Builds report. According to the report, U.S. utilities injected 52 billion cubic feet of natural gas into storage last week, slightly below the forecast of 53 billion cubic feet. US gas inventories are now 20.6% above the seasonal norm. Natural gas prices are headed for a third straight week of declines due to increased production, with higher prices in recent weeks encouraging producers such as EQT Corp. (NYSE:EQT) and Chesapeake Energy (NASDAQ:CHK) to resume drilling. Gas production in the lower 48 states averaged 98.6 billion cubic feet per day (bcfd) in June, compared with a 25-month low of 98.1 bcfd in May. On the demand side, higher than normal temperatures are expected at least until July 12, maintaining high gas consumption for air conditioning.
By Alex Kimani for Oilprice.com
More popular reads on Oilprice.com:
