Saudi Arabia's Rising Domestic Oil Consumption to Threaten Exports?

Rosneft reported one of the largest rises in crude output among the Russian oil majors last year More crude from state-owned top producer Rosneft kept Russian oil output the highest in the world last year, ahead of Saudi Arabia, Energy Ministry data showed on Wednesday. Crude output edged up almost 1% to a new post-Soviet high of 10.37 million barrels per day (bpd), but the increase could halt this year due to depleted oil fields in West Siberia.

A surge in U.S. oil production has pushed the country’s output to the highest level since 1992, threatening the dominance of the Organization of Petroleum Exporting Countries. The U.S. pumped 7.06 million barrels a day in the week ended Feb. 8, up 1 percent from the previous week and extending last year’s 19 percent gain, the Energy Information Administration said today. OPEC production fell to the lowest level in a year in January, the Paris-based International Energy Agency said today in its monthly report.

OPEC on Wednesday trimmed its forecast for global growth in oil demand in 2013, becoming the second of the world’s closely watched oil forecasters this week to predict weaker consumption. The move by the Organization of the Petroleum Exporting Countries in a monthly report follows a similar downward revision to oil demand growth in 2013 by the U.S. Energy Information Administration on Tuesday.

CALGARY — Domestic crude oil production in the United States is on track to surpass imports, Washington’s energy fact-finding arm says, in another sign of shifting market conditions that have punished Canadian energy stocks and cast doubt on multibillion-dollar oil sands expansions.

Canadian Natural Resources Ltd. and other major Canadian oil sands stocks tumbled as crude prices collapsed on forecasts of lower demand. Canadian Natural Resources shed 4.25% of its value around11.24am EST to stand at $31.11 on Friday. Other major oil sands developers Suncor Energy Inc. (down 3.17%), Cenovus Energy inc. (-2.52%) and Husky Energy Inc. (-2.65%) underlined sector-wide weakness.

One way to gauge support for the price of oil is to calculate the breakeven price. In other words, what is the dollar amount per barrel that would be required for an oil-producing country to balance its fiscal budget? Several factors go into this calculation such as the location (and quality) of a country’s reserves, and the spending habits of the federal government.

Fracking isn’t just for shale. In Russia, producers are importing techniques from the U.S. to squeeze billions of dollars of extra oil from Soviet-era fields. TNK-BP, Russia’s third-largest producer, will use hydraulic fracturing combined with horizontal drilling in almost half the wells it sinks this year, a sixfold increase in just two years, the company said. OAO Rosneft, OAO Lukoil and OAO Gazprom Neft have similar plans.

U.S. oil and gas production over the next two decades will be higher than previously expected, the government said on Wednesday, underscoring the push toward greater energy self-sufficiency and more exports of natural gas. In its annual outlook, including the first forecasts through 2040, the U.S. Energy Information Administration said imports as a share of total U.S. energy production, including oil, gas and renewables, would be 9% by 2040 against 19% in 2011 and 29% as recently as 2007.