The North American liquids market growth is fast becoming the Energizer bunny of energy: It keeps going and going and going.

According to Anthony Scott, manager of energy analysis at Bentek Energy, oil production from the U.S. and Canada has increased 35% in the past three years from 8 million bbl. per day to more than 11 million bbl. per day. As large as this figure is, the company anticipates it growing even more with another 35% increase expected by 2018.

While speaking at a recent webinar hosted by Wells Fargo Securities, Scott noted that a “significant” amount of this production is comprised of light crude and condensates from the Eagle Ford shale.

Light, sweet crude imports have decreased more than 50% since 2010, and Scott said that the level of imports should disappear entirely by the end of this year. Eventually crude and condensate production could exceed demand, similar to how natural gas production has risen above demand levels. However, Bentek anticipates that in the short term, domestic production will displace imports and in the long term, there should be enough capacity through projects that will address constraints.

“We expect that the severity of the supply- and-demand imbalance will largely hinge on the demand side and how quickly the market can adjust for the glut of light crude,” Wells Fargo said in a research note summarizing the webinar.

Since much of this production is light crude, it presents a significant problem for its domestic absorption due to the fact that most North American refineries are configured to handle heavier crude variants. Until these facilities are reconfigured, the market will continue to be somewhat stagnant. Further complicating the matter is that unlike with natural gas and NGLs, crude oil is illegal to export from the U.S.

However, the export issue won’t be as much of a problem for condensates, which will also benefit from increased demand from their heavier variants. Scott stated that condensate produced in plays such as the Eagle Ford will be under less price pressure due to access to the Gulf Coast, while plays such as the Utica will face more pressure since there is less access to end-use markets.

“We are not saying it will be a smooth ride as the market finds balance, but we believe the market has a way of sorting out these issues and E&P operators are not without options in finding a home for their production at an economic price,” according to Wells Fargo.

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