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US oil output to surpass imports this year: EIA

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(Globalpost/GlobalPost)

The US will produce more oil than it imports beginning late this year for the first time in 18 years, the Energy Information Administration said Wednesday.

Helped by a surge in shale-based output, monthly crude production has pushed past seven million barrels a day and could reach eight million barrels a day by the beginning of 2014.

Imports meanwhile have dropped below eight million barrels a day and should fall below domestic output by the end of 2013, the EIA said.

The EIA said that based on current projections, by the end of 2014 the US could be producing two million barrels a day more than it imports, a huge turnaround in the country that, until China passed it just recently, was the world's largest oil importer.

The "unconventional" recovery of oil from dense rock strata like shale has driven a leap in domestic production in the past three years.

"This projected change is primarily because of rising domestic crude oil production, particularly from shale and other tight rock formations in North Dakota and Texas," the EIA said.

Average production rose from 5.5 million barrels a day for the full year 2010 to 6.5 million last year and is projected to average 7.3 million this year.

Imports meanwhile have fallen from 9.2 million barrels a day in 2010 to a forecast average of 7.6 million for this year.

The gains in US crude production, as well as that of Canada, have contributed to softer global prices and cut into sales by the OPEC oil cartel, for decades the dominant power in world energy markets.

Last week OPEC, which accounted for around 35 percent of world supply in 2012, raised its expectation of production growth by non-OPEC suppliers in 2013 by 11 percent to 1.0 million barrels a day, with the growth mainly coming from North America.

"As in the previous year, US oil supply in 2013 is expected to achieve the highest growth among all non-OPEC countries," the report said.

Last November the International Energy Agency predicted that rising production could push by 2020 the United States past powerhouse Saudi Arabia as the world's largest oil producer, topping 11 million barrels a day, also counting natural gas liquids as well as crude.

In its monthly short-term energy outlook report, the EIA said that high domestic gasoline prices, which had been hitting consumers hard, had fallen in early March to an average of $3.71 a gallon for the first time since December.

It said that, with crude prices falling, gasoline prices will also likely drop to an average of $3.55 a gallon this year and $3.38 a gallon in 2014.

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http://www.globalpost.com/dispatch/news/afp/130320/us-oil-output-surpass-imports-year-eia-1