The US Energy boom — “Saudi America” is the story of the year, “new buzz word”, questions came to mind, why people are so excited? Thanks to oil from shale, production is growing like BANANAS, the United States oil production continues to increase to mulch-decade highs almost every week.. Here are reasons and charts that show why people are so excited.
The shale revolution continues to make the oil and gas industries among the strongest sectors of the U.S. economy.
But what really made me take notice was, when Morgan Stanley’s Evan Calio used it as a note and The economist Mark Perry tweeted it earlier this week, as well.
- According to, the Department of Energy report on U.S. crude oil production and reported that domestic oil output averaged 6.818 million barrels per day for the week ending November 23. – It is the highest amount of domestically produced oil since the first week of 1994.
- The United States oil output is up by 36%, from about 5 million barrels per day in early 2009 to the current level of 6.818 million barrels per day.
- The net oil imports to U.S. fell below 40% in October 2012, bringing the year-to-date average down to 41.4%, which is the lowest level for net oil imports since 1992.
- Well since last two years, the oil and gas sector has been adding an average of 70 new jobs to the U.S. economy each day.
- the total employment in oil and gas drilling activities to more than 195,000 in recent past months.
- Based on a report released by the Association of American Railroads, shipments of petroleum products by railroads is up by 63.6 percent for the week ending November 24 and by 44.7% year-to-date.
A shocking prediction - The Bank of America/Merrill Lynch analyst Sabine Schels, thinks it’s possible that in the next 2 years or so, prices of West Texas Intermediate crude (the benchmark for US-borne oil) could fall to $50/barrel.
“North America’s energy supplies are surging while the rest of the world continues to fight for scarce molecules of oil and gas. On our estimates, onshore US crude oil output now vastly exceeds previous growth rates in liquids and nat gas, particularly in Lower 48 states. With profitability for US domestic oil producers very high and no change in sight to US rules preventing crude oil exports, we expect WTI prices to continue to lag international prices. Indeed, we see a risk of WTI temporarily falling to $50/bbl over the next 24 months to force a slowdown in supply growth or a change in crude oil export rules.”
- The breakeven profitability levels for shale producers are well below current prices.
And the huge boom seems to just be getting started. Daily domestic production of both oil and gas is expected to surge in the coming years, according to the International Energy Agency.
So, the bottom line is that: Massive production, low breakeven costs and low financing costs– makes it the new buzz word — “Saudi America”