Thank you for posting!
At what point will these increased supplies start translating into lower consumer prices and / or USA energy independence?
Thank you for posting!
At what point will these increased supplies start translating into lower consumer prices and / or USA energy independence?
............
Hard to say. My WAG for now is not for several years.
Unlike natural gas which is priced locally. That is, natural gas is not as easily transportable as oil—so prices for natural gas tend to reflect supply and demand in the USA. Oil however, is a worldwide commodity because its easily transportable. That means that demand in China affect prices in the USA. Production disruptions in Iraq or Libya affect prices in the USA. Falling production in Mexico and Venezuela affect prices in the USA. Demand all over the world has been rising for oil. While production in the USA and Canada and Iraq have been rising—these are the exceptions. Most of the world’s oil fields are old. Their production is flat to down. Now Iraq’s internal difficulties mean that no one will invest new money into Iraq until that civil war subsides. That means that Iraq will not be raising production any time soon. That means that only The USA and Canada will be raising production for the next couple years. Set against rising world demand... I would not expect oil prices to fall for the next couple years.
For now, the US EIA Energy Information Agency expects oil production to rise by 1 million barrels @ day in each of 2014-2015 and then flatten out. However, it looks more and more likely that from 2016-2020 oil production will rise by at least 500,000 barrels@ day with the Permian Eagle Ford Baaken Gulf of Mexico and all others each kicking in 100,000 barrels @ year.
That puts oil independence at about 2019. There will be knock on effects like a strong dollar and balanced federal budgets.
After 2020 however, it looks more and more likely that oil prices will go into permanent secular decline abetted insignificantly by more oil worldwide oil fracking. But caused most significantly by worldwide change over to natural gas for transportation fuels. After 2025, if prices fall and convenience/driving distance continue to rise for electric cars then too electric cars will deliver the coup de grace permanently to high oil prices.