The US is a highly efficient producer of oil.  Fracking is a complete game changer, making oil that was once difficult to extract, now more cost effective.  The US is also blessed with abundant shale oil deposits.  Thus, the US is poised to be soon a net exporter of oil.

oil-drill-rig-petroleum-fuel

As pipeline construction finishes in 2019, a flood of oil will be hitting world wide markets.  The problem is fighting off a glut of oil.  In my opinion, those producers around the world that cannot produce oil efficiently will have to drop out.  What happens to the other producers?  I am not sure but I am certain that some international deal will be worked out; because otherwise, we are heading for a “train wreck”.

Click on the image above to read the Houston Chronicle article, written by Javier Blas of Bloomberg.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s