According to the US Energy Information Administration (EIA), crude oil and gas prices decreased significantly in 2015, reaching record low levels at the end of the year. This situation reflected the fall in global crude oil and gas prices, that also hit Europe and Asia.
Crude oil prices, which started 2015 relatively low, were down 53% in 2015 compared to 2014, averaging US$49/bbl for the year (spot prices for West Texas Intermediate (WTI) crude oil). Crude oil prices ended 2015 below US$40/bbl, their lowest level since 2009, reflecting the excess of crude oil supply over global demand. Consequently, global inventories increased steadily throughout 2015, with a net inventory build of 1.72 mbl/d, the highest rate since at least 1996. Overall, the EIA estimates the increase in OPEC crude oil production at 3% in 2015 (to 37.4 mb/d), spurred by production growth in Iraq. No significant recovery is planned in 2016, as OPEC members will maintain their production levels and as Iran is expecting to raise its output once international sanctions are lifted. Benchmark crudes reached seven-year lows in early December 2015, reaching US$39.77/bbl for ICE Brent, while the NYMEX WTI traded at US$36.87/bbl: between 5 January and 7 December 2015, Brent and WTI prices fell by 45% (to US$47.09/bbl and US$44.83/bbl, respectively), while Dubai prices fell by 48% to US$43.56/bbl.
In the United States, lower crude oil prices led to a decline in domestic production as of April 2015, though domestic production remained at its highest rate since 1972 (+7% over 2014 at 9.3 mb/d). Crude oil imports fell to their lowest levels since 1995, with Canada, Saudi Arabia, Venezuela, and Mexico continuing to be the main sources of imported crude oil.
Where gas is concerned, gas spot prices at the Henry Hub averaged US$2.61/Mbtu in 2015 (down to US$1.9/Mbtu in December 2015), their lowest level since 2012, as production and storage inventories hit record levels and fourth-quarter temperatures were much warmer than normal. Domestic gas production averaged an estimated 74.9 bcf/d (2.11 bcm/d or 772 bcm), i.e. 6% more than in 2014. Higher production and lower prices contributed to an increase in gas consumption for power generation (around 26.5 bcf/d in 2015 or 750 mcm/d). Residential and commercial gas consumption eroded in 2015 (-6.7% and -4.4%) due to warmer temperatures.
Global oversupply of gas (excess production facing weak demand) contributed to declining gas prices on world's markets. In Europe, the average gas price fell from US$10.1/Mbtu in 2014 to US$7.3/Mbtu (-28%), averaging US$6.1/Mbtu in December 2015, while LNG prices in Japan fell by 35% from US$16/Mbtu in 2014 to US$10.4/Mbtu in 2015 (down to US$8.8/MBtu in December 2015) as Japanese LNG contracts are oil-indexed. In Europe, gas consumption was challenged by low coal and oil prices.