Continuing trend of rising oil and natural gas production in the United States, mostly due to shale revolution, helped to push the country to the global No. 1 position instead of Russia, previous largest producer.
The Statistical Review of World Energy report, published on Wednesday by BP Plc, showed the increase in US oil output to a record high during the last year, reaching 1.6 millions bpd.
Natural gas production rose as well, with US getting ahead of Russia also in this segment of hydrocarbons combined.
Thus the United States were able to lower their imports of the energy commodities and provide a strong pressure on crude oil prices, dropping to even 40% of their previous prices from the top levels.
The extreme increase in oil and gas production changed the economy picture as well, strengthening the manufacturing return to the United States. Approximately 90% of the consumed energy has been produced in 2014, according to data reported by BP.
From the previous environment under different foreign policy with a current account deficit of about half of 5%of GDP, this gap has been narrowed to only 1% GDP.
As the BP’s Chief Economist Spencer Dale stated, world is ” truly witnessing a changing of the guard of global energy suppliers.” He added that the shale revolution largely contributed to this adjustment.
Moreover, additional bearish impact on oil prices came from the China’s oil consumption, rising in the slowest pace since Asian financial crisis later in the 90’s of 20th century. Naturally this comes hand to hand with the country’s struggle to get rid of its major focus on heavy industry.
Dale added “growth in some of China’s most energy-intensive sectors, such as steel, iron and cement — which had thrived during China’s rapid industrialization — virtually collapsed in 2014.”
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