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Seven years ago George W. Bush declared that, “America is addicted to oil, much of which is imported from unstable parts of the world.”
That statement is certainly not true now. Eager to make the most of consistently high oil prices, oil companies have set up 1,432 rigs this year in the US, the most since records began in 1987. According to the Department of Energy this has led the US to increase its oil production capacity by 766,000 barrels a day, to a total volume of 6.41 million barrels a day, the highest level in 15 years and the largest increase in production since the first well was drilled back in 1859. Petroleum imports have fallen by 38 percent, now accounting for 41 percent, down from 60 percent, and proof that the US is moving closer to energy independence.
Ed Morse, the global head of commodities research at Citigroup, said that “the US has a huge lead in the 21st century in maintaining its superpower status. There was absolutely no way to anticipate the level of growth in the oil supply.”
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America’s explosion in production was driven in part by new technology such as fracking, which has made drilling faster, cheaper, and more productive.
The extra production volume has led the US to increase its stockpiles by a record 13 percent; and coupled with export restrictions, which effectively land lock the oil, prices for US light, sweet crude fell to as much as $28 a barrel less than Brent crude.
The difference in price gave US refiners along the Gulf Coast an advantage over foreign competitors and this helped the US to become a net fuel exporter for the first time since 1949.
By. Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com