The latest US Oil & Gas Report forecasts that the country will account for 89.52% of North American regional oil demand by 2013, while contributing 65.75% to supply. In North America, overall oil consumption reached 21.71mn barrels per day (b/d) in 2008. It is set to rise to around 21.84mn b/d by 2013. North American regional oil production averaged 9.97mn b/d in 2008. It is set to rise to 10.95mn b/d by 2013. Net imports for the region should be 10.89mn b/d in 2013 – down from 11.74mn b/d in 2008.

In terms of natural gas, North America in 2008 consumed 757.2bn cubic metres (bcm), with demand of 792.4bcm targeted for 2013, representing 4.6% growth. Production of 757.4bcm in 2008 should ease to 726.0bcm in 2013, which implies net imports rising to some 66.4bcm by the end of the period. The US share of gas consumption in 2008 was 86.79%, while it provided 76.8% of production. By 2013, its share of gas consumption is forecast to be 86.82%, with 74.38% of production.

For 2009 as a whole, we are now assuming an average OPEC basket price of US$55.00 per barrel (bbl), a 41.5% decline year-on-year (y-o-y). This represents an upgrade from the US$52 forecast we have stuck with during the past three quarters. Our OPEC basket assumption delivers likely Brent, WTI, Urals and Dubai prices of US$56.30, US$57.50, US$55.60 and US$55.60/bbl respectively. For 2010, we expect to see a recovery to US$60.00/bbl for the OPEC price (up from our previous forecast of US$58), gaining further ground to US$65.00 in 2011 and to US$70.00/bbl in 2012. Our post-2010 forecasts are unchanged and we are continuing to use a long-term price assumption of US$70.00 for 2013-2018.

In 2009, the report is now assuming a global average gasoline price of US$62.12/bbl, with the fuel having peaked in June. The overall y-o-y fall in 2009 gasoline prices is put at 40.0%. The gasoil forecast is for an average price of US$68.62/bbl, assuming a monthly high of US$92.49/bbl in December. The fullyear outturn represents a 43.4% fall from the 2008 level. The annual jet price level for 2009 is forecast to be US$65.17/bbl. This compares with US$124.95/bbl in 2008. The 2009 average naphtha price is put at US$49.06/bbl, down 43.9% from the previous year’s level.

US real GDP is now forecast to fall by 3.0% in 2009, compared with growth of 1.1% in 2008.

We are assuming an average annual 1.3% growth in 2009-13. Average US oil and liquids production is estimated at 7.10mn b/d in 2009. By 2013, we are forecasting output of 7.20mn b/d. Our estimate for 2009 US oil demand is 18.80mn b/d, thanks to the impact of the economic slowdown on consumption.

We now see US oil use hitting 19.55mn b/d by 2013. This would require crude imports of 12.35mn b/d.

Between 2008 and 2018, we are forecasting a 3.2% rise in US oil production, with output peaking at 7.35mn b/d in 2011/12. Given oil consumption forecast to fall by 0.6%, imports ease from 12.68mn b/d in 2008 to 12.36mn b/d during the forecast period. Gas production should ease from 2008 level of 582bcm to 560bcm in 2018. Demand is forecast to rise from 657bcm to 735bcm, requiring net imports rising to a 2016 peak of 200bcm, in the form of pipeline volumes and LNG. Details of BMI’s 10-year forecasts can be found in the appendix to this report.

According to the Country Risk team, the US long-term political risk score is 85.2, compared with the Developed Markets average of 87.5 and the global average of 63.6. Our long-term economic rating for the country is 69.9, just below the Developed Markets average of 70.0 and above the global average of 53.7.

The US is a deregulated, highly competitive and relatively mature energy market. There are numerous international and domestic companies operating at all levels, from exploration, through pipelines, refining and retailing. The market is dominated by US-based organisations, with Britain’s BP the biggest foreign investor, followed by Royal Dutch Shell.