Domestic Production Boom to have Minor Impact on Current Oil Prices

Market analysts are anticipating only a slight change in global oil prices due to the boom in oil and natural gas production in the U.S.

The U.S. is growing as a global leader in oil and natural gas, partly due to new technology utilized to obtain the resources from underground shale formations.

Senior fellow Michael Levi of the Council on Foreign Relations told Climate Progress, a green energy organization, that the production of the United States most likely kept the prices of energy at a moderate level during the past year,  when the sanctions imposed on Iran contributed to tensions in the market.

Further, increases in production can have an impact on world markets in the short term. It is more difficult for the production of the United States to strongly move energy prices in the long term.

The per barrel crude oil prices from the hub at Cushing, Oklahoma surged to $108.56 in the week that ended on the 2nd of March, yet they closed 2012 at about $91.

According to the recently released report of the American Automobile Association, the national average price of gasoline throughout the entire 2012 was a record high at $3.60 a gallon.

The majority of market watchers suppose that the Organization of Petroleum Exporting Countries (OPEC) would make adjustments to its output in response to the increases of crude production in the United States, which results in a very mild impact on the current oil prices.

By: Chris Termeer