There are many factors that affect economic growth and among them is the price of oil. Like it or not oil and gasoline are still the lifeblood of our economy. The price of oil and gasoline are baked into the price of every consumer product on the shelves. Further, the more disposable income that consumers spend on gasoline, the less they will have to spend on other things. Cheaper gasoline will help promote economic recovery in the USA. Cheap gasoline is a free market induced stimulus package for everyone.
Here are a few different articles that help paint the picture of where the prices of oil and gasoline are heading in the USA.
ABC News: BC: US Oil Production: Record Rise in 2012
Total U.S. crude oil production is on target to reach 6.4 million barrels per day in 2012, the highest for any year since 1997.
In today’s report the EIA has also revised its predictions for crude oil production in 2013, now forecasting that U.S. will produce more than 7 million barrels per day for the first time since 1992.
The news comes just a week after the EIA released a report saying that the U.S. will become increasingly energy independent in the next three decades as it boosts its production of oil, natural gas and renewable power such as solar and wind.
Oil industry analysts expect that an increase in U.S. crude oil production should help push gas prices lowerWaPo Blog: Graph of the day: Americans buying more fuel- efficient cars, polluting less.
New cars bought in the fall of 2012 are using about 15 percent less fuel per mile than cars purchased in 2007. But they’re also logging slightly fewer miles overall — a sign that Americans aren’t just negating the fuel savings by driving more. Add it all up, and there’s been a 20 percent drop in greenhouse-gas emissions from new vehicles in the past five years....
This trend is likely to continue. The Obama administration has already set strict new fuel-economy standards for cars and light trucks, which are expected to average around 35.4 miles per gallon by 2025. Indeed, this is one big reason why U.S. oil imports have been shrinking — along with increased domestic oil production — and it’s why imports are projected to keep shriveling in the decades ahead.
Value Walk: Cushing Oil Inventory Increases 66 Percent In 2012
The problem here is that U.S. and Canadian oil production is increasing faster and producing more oil than Cushing can build extra storage or increase pipeline capacity, and or bring new pipeline projects online from Cushing to Houston. Oil stored at Cushing basically jumped from 30 million barrels to 50 million barrels in 2012, an increase of 20 million barrels (66 percent increase) which is just an incredible feat, just imagine if there were no pipelines pumping oil to Houston in 2012. In fact, full capacity including shell capacity would have been completely filled to the gills, and Cushing would have to stop accepting oil into its facilities...
The speculators are pushing oil up again over the past two weeks during thinly traded holiday market on low volume with the diehards trying to make their yearly numbers look better, but the fundamentals for WTI and Brent don`t bode well for 2013 with the North American production output putting downward pressure on WTI prices, and the expected increase in Oil production from Iraq, Kazakhstan, Sudan and others putting downward pressure on Brent prices.It is important to note that we are not just producing more oil here in the USA, we are also using less of it as well. A glut in the market is not out of the question and if and when that happens we will see a substantial drop in oil prices. The fools who warned the world that oil was headed for $200 per barrel failed to acknowledge that before the price could climb that high, the world economy would collapse and Exxon would find it difficult to give oil away. Those pesky self-correction factors..
Also, notice that we have reversed the direction of a major pipeline that used to deliver crude oil from the Gulf of Mexico to Cushing, Oklahoma where the storage tanks are located. Now that same pipeline delivers oil from Cushing, Oklahoma to the Gulf where it can be refined. Make no mistake though. The intent of switching the direction of the pipeline was not just to get oil to refineries in Texas. It is so that American and Canadian oil can be exported to take advantage of the higher market price for oil in other markets outside of the US. Oil used to be considered a global commodity where it was priced essentially the same everywhere. That isn't the case anymore. Understanding the WTI-Brent Spread
This is good news for Americans, except for the ones whose political extremism has made them pine for an economic meltdown in the USA just so they can find something to blame on the President. These people hate Barrack Obama more than they love the USA.