American Oil Growing Most Since First Well Signals Independence – Bloomberg 12-18-12

Salient to Investors:

US oil production expanded in 2012 by the most since the first commercial well in 1859, and to the highest level in 15 years. Net petroleum imports now account for 41 percent of demand versus 60 percent 7 years ago.

The IEA says the US will become the top producer in 8 years. US refiners are paying less for crude than much of the rest of the world. The U.S. become a net fuel exporter in 2011 for the first time since 1949, surpassing Russia as the world’s largest.

The last boom in the late 1970s was halted in 1985 when Saudi Arabia flooded the world with crude and sent prices to $10 a barrel in 1986 – US production fell for 21 of the next 22 years.

Ed Morse at Citigroup said the US has a huge lead in the 21st century in maintaining its superpower status, and North America will meet its own needs by 2020. Morse said the fear of peak oil is dead.

Francisco Blanch at Bank of America Merrill Lynch said exports may be necessary to avert a surplus that could drop WTI to$50 a barrel within 2 years.

Anthony Swift at the Natural Resources Defense Council warns of the environmental cost to investing billions in carbon-intensive fuels when we need to be investing in clean energy.

Read the full article at http://www.bloomberg.com/news/2012-12-19/american-oil-most-since-first-well-in-1859-signals-independence.html.

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