Ernst & Young: US oil output continues to rise

By Rob Starr, Content Manager, Big4.com

In 2013, the US will remain the largest source of new oil growth worldwide aided by the shale boom, but surpassing Saudi Arabia as the globe’s top oil producer by 2020 will be a challenge.

“Whether the US will become the world’s top producer is not the most important thing to focus on,” said Marcela Donadio, Americas Oil and Gas Leader for the global Ernst & Young organization. “What matters is the dramatic reversal of the US energy fortunes and the need for the US to take significant steps to ensure oil supply growth continues. Coherent energy policy, access to resources, improved infrastructure and economic stability are all key to future success.”

In 2013, the global oil supply-demand balance is expected to remain uneasy amid geopolitical tensions and economic uncertainty. Oil markets could face an ugly Arab winter given the unstable political environments in Syria, Egypt and Libya.

Profit margins for the US refining business were up across the board in 2012, with Midwest refineries having another stellar year thanks to access to cheaper WTI and Canadian crudes. While expected to diminish somewhat, the structural imbalances in the US Midcontinent are expected to continue this year, prolonging the advantage of regional refiners that have access to cheaper oil supplies.