In the span of a mere four years, U.S. production of crude oil has surged by 67%, according to the Dept. of Energy, reaching levels not seen since the late 1980s. Crude production is up 14% in just the past year. This is the fruit of new fracking technology and it is nothing short of astonishing. Natural gas production is up almost 40% over this same period, and—since natural gas is not easily exportable—this has resulted in a two-thirds decline in the price of natural gas, which in turn gives our energy-intensive industries a big competitive advantage. All of this adds up to a huge boost for the U.S. economy, and it has nothing to do with any government initiatives or infrastructure investment. Indeed, it comes despite Obama's reluctance to approve the Keystone pipeline.
Mark Perry has been doing a terrific job of covering this story. In his most recent post on the subject, he points out that "the U.S. was the world's largest petroleum producer in December for the 14th straight month."
It's hard to be bearish about the economy's prospects when you see big changes like this in a key industry.
and yet prices at the pump have tripled.
ReplyDeleteHigher crude production in the U.S. has caused petroleum imports to decline. Crude is easily exportable, so the price of crude and crude products is determined by the global supply of and demand for crude. If US had not increased its crude production, gasoline prices might have increased even more.
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ReplyDeleteHi Scott,
ReplyDeleteIs there a way to send you an email?
Thx
CJ
Scott,
ReplyDeleteI didn't think crude oil could be exported? Refined product, yes.
CJF: I think you can do it via Linked In
ReplyDeleteEnergy Production, XOP, such as Gulfport Energy, GPOR, and Energy Partnerships, AMJ, such as Cheniere Energy, LNG, and Oiltanking Partners, OILT, and Refiners, such as Marathon, MPC,and Fracking Companies, such as Basic Energy Services, BAS, traded lower from their rally highs, on a sharply lower price of Oil, USO. Look for the Ten Fastest Rising Energy Production Stocks, SGY, GPOR, FANG, MTDR, WLL, CLR, EOG, EQT, BXE, CRZO, to be the fastest fallers.
ReplyDeleteThe money bubble has finally burst, as both Equity Investments and Credit Investments as well as Nation Investment, and Small Cap Nation Investment, and Global Financial Institutions, are trading lower from their April 9, 2014, highs, this coming on the failure of credit in China, in Russia, and in the US.
The failure of credit coming at the end of the week of April 25, 2014, constitutes the most significant economic event since President Nixon took the US off the gold standard in 1971, it pivots the world out of the age of credit and into the age of debt servitude, and is evidenced by the parabolic turn lower in Chinese Financials, CHIX, China Investments, YAO, as well as Regional Banks, KRE, the US small Caps, IWC, IWM, as well as Credit Providers Visa, V, and Mastercard, MC, the nation of Russia, RSX, ERUS, and Leveraged Buyouts, PSP, and manifests as the death of Major World Currencies, DBV, such as the Australian Dollar, FXA, and Emerging Market Currencies, CEW, such as the Chinese Yuan, CYB.
Now, the investor is going extinct; especially the fixed income investor; that is those invested in a Pursuit Of Yield like those invested in Electricity Utility Stocks, PUI, XLU, such as New Era Energy, NEE, Real Estate REITS, RWR, such as General Growth Properties, GGP, in Energy Partnerships, AMJ, such as Cheniere Energy, LNG, and Oiltanking Partners, OILT.
The failure of credit is an extinction event, that pivots the world economy out of liberalism, that is the paradigm and age of credit and investment choice, and into authoritarianism, that is the paradigm and age of diktat and debt servitude, which features the debt serf, is the centerpiece of economic activity.
Under the power of the Rider on the White Horse, as is seen in Revelation 6:1-2, the bond vigilantes are effecting a global economic coup d’etat, transferring sovereignty from democratic nation states to sovereign regional leaders and sovereign regional bodies, such as the ECB, by calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48% on October 23, 2013, and are powering up the singular dynamo of regionalism to establish regional security, stability, and sustainability, to deal with the destructionism of unwinding currency carry trades and debt trades
Investors greed has turned to fear; fear that debtors will not repay lenders, with the result that the Pursuit Of Yield Investments such as Leveraged Buyouts, PSP, Emerging Market Financials, EMFN, Shipping, SEA, Chinese Real Estate, TAO, Water Resources, FIW, Energy Partnerships, AMJ, and Global Utilities, DBU, which underwrote the age of credit, are now trading lower. It’s “Hasta la vista baby” to Shippers, specifically the Greek shippers, NM, SB, DSX, NNA, TNP and GASS.