So, as oil price and availability are key global economy drivers, we would be well advised to take note.
Plunging drilling costs have sparked an explosion of production out of the Permian Basin of West Texas. In fact, Texas is pumping so much oil that it will surpass OPEC members Iran and Iraq next year, HSBC predicted in a recent report . . . . The hyper growth out of Texas is needed because oil prices have risen sharply and major players like Saudi Arabia are quickly maxing out their production . . . . Rapid technological advances have dramatically brought down the cost of pumping oil everywhere, especially out of the Permian. Wells there can be profitable below $40 a barrel.It has been suggested that the US would overtake Russia and Saudi Arabia, becoming number one.
"The industry cracked the code on fracking," said [Bob McNally, president of Rapidan Energy Group, a consulting firm and a former White House Official].
The rise of Texas, which is also home to the Eagle Ford oilfield in the state's south, shows how the shale oil revolution has reshaped the global energy landscape. The United States is pumping more oil than ever before, making it less reliant on the turbulent Middle East for imports . . . .
The combined output of the Permian and Eagle Ford is expected to rise from just 2.5 million barrels per day in 2014 to 5.6 million barrels per day in 2019, according to HSBC. That means Texas will account for more than half of America's total oil production.
By comparison, Iraq's daily production is seen at about 4.8 million barrels, while Iran is projected to pump 3 million. Oil supplies from Iran are likely to plunge due to tough sanctions from the United States.
Brent is currently at the US $72/bbl level, with West Texas Intermediate about $4 lower. Saudi Arabia recently added 4- 500,000 bbl/day, in an attempt to tame a price rise trend.
All of this will bear further watching. END