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Forex Flash: US a rising oil superpower – RBS
FXstreet.com (Barcelona) - As US production of crude oil
continuing to rise dramatically, its daily production levels stood
at 6.852m barrels as at the week ending December 7th notes Omair
Sharif, US Economist at RBS.
This is the highest level seen since January 1994 and for all of 2012, the Energy Information Administration predicted that US Crude oil production would average 6.4 million barrels per day, a 760,000 bpd increase from last year. In a statement, the EIA notes that "the expected 760,000 bpd increase in US Crude oil production this year is the largest rise in annual output since the beginning of US commercial crude oil production in 1859."
Sharif highlights the EIA forecast that US crude oil production would rise further to an average of 7.1 million bpd in 2013, which would mark the highest level since 1992. Additionally, it its annual World Energy Outlook, the International Energy Agency forecast that the US would overtake Saudi Arabia as the largest producer of Crude Oil in the world by 2017. The agency also indicated that a reduction in US imports of crude oil would lead to North America becoming a net exporter of oil in 2030.
In addition to rising domestic production, Sharif believes that early 2013 will see cheaper West Texas Intermediate oil flowing from Cushing, Oklahoma to refineries on the Gulf Coast. Additionally, WTI currently trades at a discount of about $22 to Brent, so Gulf Coast refineries that usually process more expensive Brent will have more supply of cheaper WTI, which may put further downward pressure on retail gasoline prices in early 2013.