Growth of World Oil Supplies

  March 1, 2016

With oil prices continuing to fall throughout January, the focal point has been an over supply of the commodity, which is now in abundance worldwide. The IEA reports that daily world oil consumption is currently less than daily oil production by roughly 1 million barrels per day.

The international energy agency reported that over 64% of the world oil production has come from just 10 countries. As these countries produce oil, they have some basic options such as to refine it, consume it, export it, or store it.

As of this past year, the U.S. has the single largest supply of crude oil in the world, with over 2 billion barrels in inventory as of Jan 29th. With the U.S. now able to export its own oil production, both as refined and crude, it also has been stockpiling oil for months. As a result, the U.S. has maintained the single largest supply of oil worldwide. Partially because of this oversupply, Congress agreed in December 2015 to overturn a 40-year old ban on oil exports, thus allowing the U.S. to export some of its excess supplies.

The onslaught of fracking and technological advances in drilling has led to increased U.S. production and supply growth. Saudi Arabia’s attempts to destabilize U.S. drillers with increased production and lower oil prices also led to an increase in supplies for other countries.

 

Sources: IEA, U.S. Energy Department

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