U.S. crude oil proved reserves declined 4.7 billion barrels (11.8 percent) from the year-end 2014 level to 35.2 billion barrels at year-end 2015, according to U.S. Crude Oil and Natural Gas Proved Reserves, Year-end 2015 report released today by the U.S. Energy Information Administration. The U.S. natural gas proved reserves also decreased 64.5 trillion cubic feet, a 16.6 percent decline, reducing the U.S. total to 324.3 trillion cubic feet at year-end 2015, according to the report.
Proved reserves are those volumes of oil and natural gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.
The significant reduction in the average price of both oil and natural gas between 2014 and 2015 resulted in more challenging economic and operating conditions, an important factor in determining proved reserves. These price developments, reflected in a nearly 50 percent decline in average West Texas Intermediate crude oil spot prices (from $95 per barrel in 2014 to $50 per barrel in 2015) and a more than 40 percent decline in the natural gas spot price at the Louisiana Henry Hub (from $4.55 per million Btu in 2014 to $2.62 per million Btu in 2015) led to reduced drilling activity and downward revisions in proved reserves across a broad range of U.S. producers in 2015.
New Mexico had the largest net increase in proved reserves of crude oil and lease condensate of all states in 2015, mostly from development of the Wolfcamp shale and Bone Spring plays in southeastern New Mexico’s portion of the Delaware Basin.
Crude oil and lease condensate extensions to existing fields were highest in Texas and North Dakota in 2015. However, as a result of downward revisions, both states experienced a net reduction in proved reserves.
In 2015, Ohio added more than 5 trillion cubic feet of natural gas proved reserves and surpassed Arkansas and the Gulf of Mexico to become the ninth-largest natural gas reserves state.
Global oil demand is expected to increase, according to OPEC’s Nov. 11, 2016, Monthly Oil Market Report. In 2017, world oil demand is expected to grow by 1.15 million barrels per day to average 95.55 million barrels per day. This follows a marginal downward adjustment to account for the slower-than-expected performance of Latin America and the Middle East, which was almost entirely offset by better-than-expected oil demand growth.
World economic growth is forecasted to remain unchanged at 2.9 percent for this year and 3.1 percent for 2017, according to the report. This growth helps to provide an overall potential for oil demand for the remainder of 2016, as well as the potential for 2017 oil demand to be on the positive side, according to the report.