The 2010-2020 decade will be underlined by the fact that the US, which is the world’s largest consumer of oil, will become self-sufficient in oil. US exporting oil will see major economic and political shifts as the country emerges as a technology as well as an oil giant.
Our 2018 theme focuses on such shifts as our model portfolios are geared towards 2018 where many factors are expected to play out including the US becoming self-sufficient in oil. We will be tracking US oil production on a monthly basis.
Higher Oil Production, Lower Oil Imports and Lower Trade Deficit
According to US commerce department the US trade deficit dropped 12.9 per cent in November 2013 on month on month basis to USD 34.25 billion. The drop in trade deficit is attributed to rising American exports and surging energy production domestically. US trade deficit, which was reported at USD 48.42 billion in November 2013, is down to levels of USD 34.25 billion in November 2013, a drop of 29%. US trade deficit has dropped 18.6% year on year in the January – November 2013 period.
US Oil production has increased by 41% in the period January 2011 to October 2013. The higher oil production had led to significant decrease in US Oil imports, which have reduced by 18% since 2011.
The primary reason for rising oil production in the US is the big innovation in development of shale oil.
(Image 1:US trade deficit chart)