Thanks to fracking and shale oil production, the United States is becoming a leading producer of Oil and Gas in 2013, overtaking Russia. Some facts:
- Average oil production in October 2013 was 7.8 mbpd, 19% higher than last year.
- Rising crude supplies from North Dakota’s Bakken shale and Eagle Ford shale in Texas have helped the U.S. become the world’s largest exporter of refined fuels.
- Per EIA, Texas pumped 2.575 mbpd in June-if Texas were its own country, it would rank 15th in the world in terms of oil production.
- The U.S. met 87% of its energy needs in the first five months of 2013 and is on target to hit the highest annual rate since 1986.
- Exports are surging from 1 mbpd in 2006 to 3 mbpd recently.
- Imports are falling from a high of 14 mbpd in 2007 to under 10 mbpd recently. If you take out the re-export of refined products, the Net Imports have fallen even faster to 6 mbpd from 13 mbpd.
Can this declining U.S. net import of Oil and Gas have an impact on the U.S. dollar through its linkages to Current Account Deficits? Generally, a declining Current Account Deficit should be a tail wind for that country’s currency. Also, cheap and abundant natural gas in the U.S. is becoming a competitve advantage to begin bringing offshore production back onshore, which can further impact trade flows and deficits.
Can the once mighty U.S. dollar regain its footing again?