Earlier today we reported on the BofA/ML analyst who thinks it’s possible that in the next 24 months, prices of West Texas Intermediate crude (the benchmark for US-borne oil) could fall to $50/barrel.
The basic gist: Thanks to oil from shale, production is growing like bonkers, and it will overwhelm the infrastructure, leading to huge gluts and collapsing prices.
There’s a new phrase being bandied about and that’s “Saudi America.”
We first noticed it earlier this month when Morgan Stanley’s Evan Calio used it to title a note. The economist Mark Perry used it on Twitter earlier this week, as well.
Even if it’s an exaggeration, the boom in domestic energy (and the diminishing reliance on foreign oil) is one of the biggest US economic stories right now.
Here are some charts that show why people are so excited.
Growth in US oil production this year has just been insane. It's put growth everywhere else to shame.
The boom in oil has been so fast that it's stretched our infrastructure. Producers are forced to ship it by rail, since there's no other way to move it. 2012 has been a dynamite year on this front.
And the huge boom seems to just be getting started. Daily domestic production of both oil and gas is expected to surge in the coming years, according to the International Energy Agency
Of course, the story wouldn't be complete unless the US became an EXPORTER of oil. And that could happen in a big way by 2020.
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