[Graeme]

Move Over OPEC and Russia, America is in the Oil-Price Driver's Seat

Want to know something that you probably haven't considered, but will absolutely blow your mind? Since 2011, two of the world's top 25 oil-exporting nations -- Libya and Sudan -- have seen production completely fall off a cliff, Export volumes from Venezuela and Mexico have been on a slow decline for a decade, and Russia and the West are in the midst of a Cold War-esque standoff over Ukraine. Yet over the last three years, the price of crude oil has not just stayed flat, it has declined. Step back and think about that for a minute. This was a market that used to go into panic mode if the king of Saudi Arabia had a bad meal, and now nearly 2 million barrels a day in production can vanish from the global market without anyone blinking an eye.

What has been the biggest factor in this change? American oil production. Since 2011, U.S. oil output has increased by nearly 3 million barrels per day and reduced the nation's dependence on the foreign markets to meet our energy needs. This production has brought an unprecedented level of stability to the global market and, even more miraculously, might actually have placed the United States in a more powerful position in the market than traditional powers such as OPEC and Russia. Let's look at why we are now in the leader position and what that means for American oil production over the next couple years.

fool

[BobInget]

FOOL leaves out ongoing, soon to be four year, Syrian so called civil war. Russia and Iranian government on govt.'side' while Saudi Arabia and the US are supporting several rebellious militia groups.
Recently, Saudis were angered by President Obama's reluctance to engage Iran militarily and destroy
the Syrian government's ability to resist rebel factions.
Between Iran, Russia, KSA and the US we have four of the world's biggest oily nations. Enter Iraq, potentially a four million barrel per day producer but currently also busy fighting a bloody civil war.. As FOOL correctly states, Libya and Sudan may not be permanently out of the 'game' but close.
(Sudan, South Sudan in famine, Libya, utter chaos)

It has to be said, months of oil exporting from S. Iraq are numbered. Kurdish in northern Iraq will continue to supply needs of Turkey which could easily evolve into the most powerful Islamic power as a result.
Venezuela's production has all but shifted completely to Chinese debt service.
Mexico will do well to supply its own oil and gas requirements for the balance of this century.
Egypt has become a ward of Saudi Arabia, placing a huge drain on KSA exports.

Nigerian army personal have been so corrupted by stolen crude bribery money, they have little interest in fighting Boko Haram or anyone armed, for that matter, only US military can keep the most populous African nation from another religious/oil based civil war. Are Americans prepared to die for Nigerian Light crude?

Off Shore Arctic reserves may not safely be tapped with current technology.

Only if the US acts quickly to lock up the world's second largest oil reserves in Canada, (oil sands) can the US hope to feed itself, much less dictate world oil prices.

Look no further then V. Putin if one is seeking the next international Oil Tzar.
Carefully aligned with Iraq, Iran, China, Venezuela, Ecuador, Qatar, watch Russia take charge of OPEC shambles. Even Saudi Arabia is shifting exports to Asia after nursing Egypt into a military dictatorship.

Iran, Iraq, Russia and China are pulling off one huge financial coup. Disengaging from USD transactions there-by telling Americans to 'go bite your selves' on sanctions. If Americans respond militarily
China, Russia, could call in trillions of US debt, thereby collapsing the US financial system.
Doubtless the political repercussions resulting would end in military dictatorship in the US at least for seven or eight years.

I'm sorry FOOL, wish it were no so but that's the way I see it.

[ROCKMAN]

"America is in the Oil-Price Driver's Seat" And thank Dog it is. I'm not sure what me and the other petroleum geologists would be doing today if the US hadn't forced prices up 300% in the last 10 years and has done all it could to hold them there. Thank you America and Dog bless you.

[copious.abundance]

... Only if the US acts quickly to lock up the world's second largest oil reserves in Canada, (oil sands) can the US hope to feed itself, much less dictate world oil prices. ...

Silly doomers.

According to the Energy Information Administration, the shale oil boom will account for over 80 percent of the growth in U.S. oil production through 2020 and could effectively eliminate imports of foreign crude if production remains strong.(i) EIA expects U.S. oil production in 2020 to tie the record for the highest domestic oil production ever at 9.6 million barrels a day previously set in 1970. Increasing to 9.6 million barrels a day is almost 50 percent higher than the 6.5 million barrels per day produced in 2012. At those levels, shale oil production will account for about half of the nation’s oil output. Further, if the industry can become more productive and develop more resources, the U.S. can eliminate crude imports altogether. To achieve this, improved production techniques, higher well productivity rates, and more resource development in Alaska and offshore are needed, but the latter requires more cooperation from the Federal government than has been the case under the Obama Administration.

[Graeme]

What a Fool believes
For the next 10 years or so, America will likely be the stabilizing factor in the global oil markets because its cheap, reliable oil supply can help offset major production disruptions elsewhere, or even displace some of these more expensive oil sources. Is this a sustainable position? Probably not. According to the Energy Information Administration, after 2020 oil production in the U.S. is expected to slip again as shale output starts to decline. Also, Saudi Arabia is sitting on vast quantities of oil that will likely be in greater need 10-15 years from now than today.

[dolanbaker]

What a Fool believes
For the next 10 years or so, America will likely be the stabilizing factor in the global oil markets because its cheap, reliable oil supply can help offset major production disruptions elsewhere, or even displace some of these more expensive oil sources. Is this a sustainable position? Probably not. According to the Energy Information Administration, after 2020 oil production in the U.S. is expected to slip again as shale output starts to decline. Also, Saudi Arabia is sitting on vast quantities of oil that will likely be in greater need 10-15 years from now than today.

Cheap! $100 as opposed to $25 a decade ago
Reliable, well yes but only if the price stays high.

[ROCKMAN]

Dolan - Maybe it's just human nature that as we stumble down the PO path some folks will try to generate optimistic stories out of basically negative news. Just like the excitement that the increase in the GROWTH RATE in Chinese coal coal consumption has abated. That's good news but does change the fact that China is consuming almost 300% more coal today the it was just 10 years with no indication it will be reduced in the future. Stable oil prices? Yes instead: the world is spending a nice stable $2 TRILLION more per year then it was before the price surge. Oh yes...feel much better now knowing that we'll just keep transferring those $trillions to the oil producers. LOL.