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Are we looking at a new oil world order with the US in control?

Hail the new oil production king. America is now the world’s largest oil producer, unseating Russia with nearly 11 million barrels per day (bpd). That nudged the US ahead of Russia for the first time since February 1999, the EIA (International Energy Agency) estimates.

“For the first time since 1973, the US is the world’s largest producer of crude oil, according to preliminary estimates published on Wednesday by the US Energy Department, reports CNN.

“The EIA expects US oil production to stay ahead of Russia and Saudi Arabia through 2019,” reports CNN.

But how long can it hang on to that spot?

Read: Brace for an oil market price rally in November: Details here 

Tech, prices, allies to US

Fracking unlocked vast sums of oil and natural gas that had been trapped underground and drilling costs have declined dramatically, reports CNN.

But 5 years ago, the US was very vulnerable and paid a heavy price after oil prices crashed beginning in late 2014.

Falling prices knocked dozens of US oil companies out of business. In May 2016, SandRidge Energy filed for Chapter 11 bankruptcy based on roughly $4 billion of debt, becoming the second-biggest oil-focused U.S. company to file for, according to a CNNMoney analysis, following Linn Energy which had more than $10 billion in debt.

This came despite then an 80% spike in oil prices since mid-February 2016 to around $47.50 and killing nearly 200,000 U.S. jobs.

But when prices began to rebound later in 2016, US shale companies were able to quickly ramp up output on lower expenses and better technology.

Texas is an oil superpower and is on track to produce more oil than either Iran or Iraq.

That would make Texas No. 3 in the world if it were a country.

2019 US oil production is expected to reach 11.5 million bpd from 9.4 million bpd in 2017, however, strategy shifts by OPEC and Saudi Arabia continue to have significant influence over prices.

“And the United States can’t meet its voracious appetite for oil by looking inward only. US oil refineries, which were mostly built decades ago, still require heavy doses of foreign oil,” reports CNN.

Read: Why the modern-day oil and gas industry needs millennials to survive

Boom and Bust market

According to a CNBC report, we live in a period of boom and bust in the oil market.

In the summer of 2008, a global recession destroyed demand for energy and toppled crude from its all-time high above $147 a barrel to less than $30 in 2016.

“Today, some of the same factors that pushed oil prices to the stratosphere then are re-emerging, raising fresh concerns about another round of triple-digit oil prices,” said CNBC.

But even as the world’s appetite for oil is growing, oil companies have scaled back on investments in big, long-life projects following a period of low prices.

Oil companies already cut spending on exploration and production for the 2015 to 2020 period by about $1 trillion, according to energy research firm Wood Mackenzie.

Read: Sanctions on Iran causing more volatility for oil and global markets

“Geopolitics and production problems are capping output in some OPEC countries, and spare capacity in Saudi Arabia, in the world’s top exporter, remains thin,” said CNBC.

“The market may become a little bit more volatile as we go forward and we might expect larger price swings.”

H1 Oil prices hit a 3.5-year high above $80 this year, amid strong demand and supply outages from Venezuela, security issues in Libya and structural decline signs in Angola, while the renewed U.S. sanctions on Iran threaten to take roughly 1 million barrels of the nation’s supply off the market.

Analysts warned that oil prices could go cross the $100, and reach $150 if not more if Iran attempts to shut down the Strait of Hormuz, the world’s busiest oil shipping lane, in response to U.S. sanctions.

Read: Where are oil prices heading and what is controlling them?

Record Supply

The world’s supply of oil hit a record last month, yet another sign of oil’s dominance over the energy landscape, reported the Calgary Herald.

The EIA said Thursday that the global oil supply reached 100 million bpd for the first time ever, boosted by rising production in the U.S. and several OPEC nations.

“Demand for oil grew more slowly in the second quarter but will continue to rise this year and in 2019,” the group said, adding much of the increase in production is coming from OPEC and the US.

OEPC accounts for about 1/3rd of all production.

EIA said OPEC has another 2.7 million barrels a day of spare production that it could tap, 60% of it in Saudi.

“Worldwide demand will rise 1.4 million barrels a day this year and 1.5 million a day in 2019,” said Calgary Herald.