Bloomberg is reporting today that last month, for the first time since February 1995, the U.S. produced more crude oil than it imported: 7.7 million barrels per day in October, versus 7.6 million of imports.
Domestic output ticked up further to a level just shy of 8 million barrels per day in the week that ended Nov. 8, according to data from the Energy Information Administration. Last year, USA was more energy self-sufficient than USA has ever been since 1991. US production is outpacing imports that hasn't happened in nearly 20 plus years.
I wrote an article in 2006 ' There's (going to be) plenty of oil - Global oil output to surge 25% by 2015, on August 15, 2006, I argued and supported the idea that oil peak may be is a 'false Malthusian kind of warning', I highlighted against prevalent and rampant popular wisdom that 'why many of the "doom and gloom" forecasts of "peak oil" are based upon a common misunderstanding about oil supplies' as ' Oil and natural gas production capacity should surge by 25% to 110 million barrels per day by the year 2015 - the result of investments in new and unconventional petroleum sources like oil-sand deposits and oil shale.' (my article was based on a study conducted by Cambridge Energy Research Associates in 2006 - CERA).
It is pleasant to see for me that recent developments were as predicted, recent drop in US oil prices will put 30 billion $ in the hands of the customers. Texas alone now ranks as the 13th-largest oil producer in the world. US oil output is surging thanks to fast-growing production from shale rock formations such as the Bakken in North Dakota and Eagle Ford in Texas.
Analysts say that "the reason why no new significant oil deposits were discovered in the 1980s and 1990s is because at $20 a barrel it did not make any economic sense to go out and try and discover new oil. In hindsight, you drive oil to $147 barrel and lo and behold, five years hence the world is swimming in oil. It really is that simple."
Citi's Seth Kleinman had written a pretty sweeping note in March 2013 in businessinsider, titled "The End Is Nigh," in which he argued crude oil demand — and with it, prices — are is set to fall dramatically in the coming decade thanks to the rise of natural gas and more advanced fuel economies. One of the many unforeseen ripple effects of the US shale revolution is a push to substitute natural gas for oil. This is set to accelerate with LNG already challenging diesel’s 13 mb/d heavy duty truck use globally but especially in China, bunker’s 3.7 mb/d seaborne market, and CNG and propane set for exponential growth not only in markets such as Brazil, Egypt, Iran and India, but in Russia and the US as well.
Oil-based power generation is increasingly being replaced by gas-fired generation. As much as 2 mb/d of power generation demand in the Middle East in total could be switched to natural gas by the end of the decade, and the increasing availability of LNG towards end-decade could back out other oil for power generation needs in India and Latin America amongst others.
Fuel economy is on the rise in America. And better fuel economy is also coming to other countries, where new regulations will come into effect. Citi’s automobiles team estimates that new car fuel efficiency is now improving by 3-4% p.a., with trucks managing 1-2%. As cars make up ≈60% of the total global road fleet we conservatively estimate that new vehicles (cars and trucks combined) fuel economy increases by 2.5% p.a.So oil demand is flatlining.
America's shale boom could rearrange the Middle East's balance of power.The Saudis may still lead in oil production, but the U.S. is gaining fast. Saudi Prince Alwaleed has already sounded the alarm about the threat shale oil and gas development poses to the petro-kingdom's barely diversified economy. Saudi Arabia needs high oil prices to function — Below $80 and the kingdom starts getting into trouble. There are clearly visible trends that could easily push prices much lower.