According to statistics of the Energy Department report on domestic crude-oil stockpiles, United States at present has more oil storage since 1931. The picture is clear now that expansion of the U.S. shale oil is giving new horizons to U.S. energy markets.
According to the energy department in its weekly Petroleum Status, the commercial crude-oil stockpiles increased to 397.6 million, which is an increase of 3 million. The oil stockpiles have surged 10 percent since the beginning of the year, and when compared to 2008, it has increased 30 percent.
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U.S Oil Price Is Less Than $100
The price of the U.S. oil is less than $100 per barrel due to extra supply. The price of the oil is in triple digits outside the United States.
New supply sources
North Dakota, the Eagle Ford shale in South Texas and the Marcellus formation in Pennsylvania, are the new sources from where oil is supplied. These areas are producing oil in abundance due to hydraulic-fracturing drilling technology.
In March, 783,000 barrels per day were produced in North Dakota, which is an increase of seven times from 115,000 barrels per day that was produced here towards the end of 2006. The oil production in Texas grew by two times in the past six years, and currently the levels are the highest since 1989.
Now and then
There is a similarity between the burgeoning supply levels today and that of 1931. In both cases, the United States oil market was stockpiled due to new sources of domestic productions.
Wildcatter Columbus “Dad” Joiner explored the East Texas oil field in Rusk country, Texas, according to Daniel Yergin’s The Prize in 1930. This discovery turned out to be the largest oil reservoir in the connecting U.S. By the year 1931, 500,000 barrels a day was extracted from the field per day and the price of oil came down to six cents per barrel from $1 per barrel.
The United States had gross domestic product of $76.6 billion, or $703.6 billion in 1996 dollars, according to Census Bureau. At that time, Herbert Hoover was the president of the United States.
In 2012, the GDP of the United States was more than $15 trillion (in 2012 dollars). The population of the United States at that time was 124 million, which is not even half of the population of today. At that time, 24 million motor vehicles were registered in the United States as against approximately 250 million in 2010. The price of the oil was 65 cents a barrel compared to $10/bbl. in today’s dollars.