Crudel oil production on the rise globally

Even the Wall street Journal today is bringing up something we have talked about many times before and that is our dependence on Middle Eastern oil is becoming a thing of the past. In today’s Journal it says, "America will halve its reliance on Middle East oil by the end of this decade and could end it completely by 2035 due to declining demand and the rapid growth of new petroleum sources in the Western Hemisphere, energy analysts now anticipate.

The shift, a result of technological advances that are unlocking new sources of oil in shale-rock formations, oil sands and deep beneath the ocean floor, carries profound consequences for the U.S. economy and energy security. A good portion of this surprising bounty comes from the widespread use of hydraulic fracturing, or fracking, a technique perfected during the last decade in U.S. fields previously deemed not worth tampering with.”

The Journal in this must read goes on to say, “By 2020, nearly half of the crude oil America consumes will be produced at home, while 82% will come from this side of the Atlantic, according to the U.S. Energy Information Administration. By 2035, oil shipments from the Middle East to North America "could almost be nonexistent," the Organization of Petroleum Exporting Countries recently predicted, partly because more efficient car engines and a growing supply of renewable fuel will help curb demand. The change achieves a long-sought goal of U.S. policy-making: to draw more oil from nearby, stable sources and less from a volatile region half a world away.”

Someone ought to tell this to Obama. He has said that we can’t drill our way to energy security and as I have said before, YES WE CAN! YES WE CAN!

While in the long run this will change the face of our foreign policy and our national security, in the short run we still have to watch the unfolding drama in Syria. Brent crude seemed to rally on increasing concerns that the civil war, or slaughter as I call it, may spill over its borders and engulf the entire region. Turkey, after getting a plane shot down, may enter the fray and the region could soon boil over.

Still with the market is well supplied as it has been anticipating a conflict and at least at first the price impact may be somewhat muted. Still we have to keep an eye on developments.

We also have to keep an eye on developments out of Europe. The comments from Angela Merkel about no Euro Bonds in her lifetime seemed to get the deflationary winds blowing. Stay tuned!

 

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About the Author
Phil Flynn

Senior energy analyst at The PRICE Futures Group and a Fox Business Network contributor. He is one of the world's leading market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets. His precise and timely forecasts have come to be in great demand by industry and media worldwide and his impressive career goes back almost three decades, gaining attention with his market calls and energetic personality as writer of The Energy Report. You can contact Phil by phone at (888) 264-5665 or by email at pflynn@pricegroup.com. Learn even more on our website at www.pricegroup.com.

 

Futures and options trading involves substantial risk of loss and may not be suitable for everyone. The information presented by The PRICE Futures Group is from sources believed to be reliable and all information reported is subject to change without notice.


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