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Global crude shortages now outweighed by US production

Shane Thielges | Shale Plays Media

Record-setting production levels of liquid fuel in the U.S. are high enough to offset global oil price spikes caused by unplanned production disruptions, reports the Energy Information Administration.

The results of a multi-year EIA study of America’s effect on the global energy market were released yesterday. The organization concluded that the country’s growing liquid fuel industry, which produces crude oil, natural gas liquids and biofuels among other types, has become substantial enough to insulate the global market against crude price fluctuations caused by unforeseen circumstances.

Unexpected deficits in global production often cause supply shortage scares and drive up the price of Brent Crude, an international benchmark for the price of a barrel of oil.

The EIA compared the growth rates of liquid fuel production to losses from unplanned shortages and found America’s expansion has outpaced global deficiencies for about the past year. This increasingly abundant supply eases demand and keeps prices stable. Gains have surpassed losses before, but the trend now appears steady and is projected to continue into the future.

Have a look at the EIA’s comparison chart:

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Image courtesy of EIA.gov

 

Unplanned supply disruptions can come from many sources. The EIA’s 2013 report, for example, cites strikes and protests in Libya, infrastructure damage in Nigeria, economic sanctions in Iran and attacks from militants in Iraq as major blows to yearly production. Note that such incidents are still becoming more common, but at a slower rate than U.S. produces fuel.

 

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Image courtesy of EIA.gov

View the EIA report: U.S. liquid fuels production growth more than offsets unplanned supply disruptions

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