U.S. becomes world's top oil producer, but July 4 gas prices at six-year high

The U.S. became the world’s largest natural gas producer four years ago, and now it is the world's top producer of crude oil, surpassing all other countries with output exceeding 11M bbl/day in Q1, according to a new report issued today by Bank of America.

Partly as a result of the shale boom, West Texas futures are at a ~$7/bbl discount to their Brent European counterpart, but it hasn’t made the expected impact on pump prices: “Typically such a large energy supply growth should bring prices lower, but in fact we’re not seeing that because the whole geopolitical situation outside the U.S. is dreadful," says BofA’s head of commodities research.

Drivers on the road for the Fourth of July weekend are facing the highest gasoline prices since 2008, despite the fact that U.S. oil production is its highest since 1986 and gasoline is well supplied across the country.


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Comments (50)
  • richardhall
    , contributor
    Comments (13) | Send Message
    Gasoline prices in central ohio 2014 have come down and we are enjoying the lowest fourth of july prices in ages. The price has dropped over .35 cents in the last two weeks! Now Under 3.40 at most stations.
    5 Jul 2014, 08:40 AM Reply Like
  • Archman Investor
    , contributor
    Comments (3352) | Send Message
    Depends where you live. I am finding that gas pricing is similar to real estate pricing. It varies state to state and markets are local.


    Here on the north shore of Long Island NY, pricing for regular 87 is $4.00 / gallon.


    Pricing for Super 92? Forget about it. Better off walking, getting exercise and saving money.
    5 Jul 2014, 08:46 AM Reply Like
  • Pepe Latoga
    , contributor
    Comment (1) | Send Message
    Not here in California.We are still suffering $4.15 a gallon. We do not believe the U.S. is now an exporter of Crude Oil.Maybe corporate greed.
    5 Jul 2014, 03:01 PM Reply Like
  • robgra
    , contributor
    Comments (1083) | Send Message
    The U.S is not an exporter of crude. The Obama administration recently made an exception for "condensate", for which most U.S. refineries are not adapted.
    Export of gasoline, however, is allowed, so world markets set that base price. Crude remains cheap (compared to world prices) because we have a local oversupply that we can't export. Not corporate greed, but stupid government policy. We still import crude for many refineries because they are configured for heavy crude, rather than what we produce locally.
    5 Jul 2014, 05:17 PM Reply Like
  • robgra
    , contributor
    Comments (1083) | Send Message
    If you can afford a car that requires Super 92, you should not gripe about the price of the fuel.
    5 Jul 2014, 05:21 PM Reply Like
  • Robin Hewitt
    , contributor
    Comments (5561) | Send Message
    California has some oil natively but probably imports from abroad and/or rest of US. Sierra Nevadas stand between rest of the US and the populated regions of California, so even domestic can't get here easily. Refining for California blend also adds cost, but since I remember the days when you couldn't even see the mountains in SoCal during summer for the smog (and every breath was painful), I'm willing to pay for the enormous improvement in air quality we now enjoy. Besides, it costs me only about $50/month to keep my Hyundai fueled -- a tiny fraction of my rent.
    5 Jul 2014, 05:34 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1638) | Send Message


    Why don't we walk to the One Woman Winery to sample some wine?
    5 Jul 2014, 05:45 PM Reply Like
  • Moon Kil Woong
    , contributor
    Comments (13495) | Send Message
    LOL Don't worry, the oil companies are trying to solve your cheap gas price by exporting the excess in the US and our politicians are supporting it thanks to the money the oil lobbyists dole out. In reality, the US has excess oil and prices should be even lower.


    Of course they own California where oil bought liberals and have created a blockade of only 2 oil companies able to supply oil to California no matter how much excess the rest of America has. Consequently California now gets the lest gas mileage for the highest prices and the gas they drive with used to pollute the groundwater worse than any oil in the world.


    The problem is not supply, the Middle East, or US fracking laws. The problem is political, namely we let our politicians be bought by special interest leaving no room for the will and need of the electorate to reflect in laws, especially regarding oil and energy.
    5 Jul 2014, 08:47 PM Reply Like
  • june1234
    , contributor
    Comments (4414) | Send Message
    Im afraid the price of any paper commodity and its physical counterparts are not correlated, they haven't been for many years. Ive seen it more than once this year in some cases inventories printed at twice expected number and the price of oil and gas kept shooting up.
    6 Jul 2014, 09:00 AM Reply Like
  • jahu
    , contributor
    Comments (19) | Send Message
    ...So I guess the same ones will be re-elected next time. :)
    6 Jul 2014, 09:58 AM Reply Like
  • Archman Investor
    , contributor
    Comments (3352) | Send Message
    Hi Rinascimento:


    I do not live as far east as Southold. Checked out their website.
    Good product? Thoughts? Recommend?


    Always looking for another weekend destination.


    Best to you.
    6 Jul 2014, 10:13 AM Reply Like
  • bnkd
    , contributor
    Comments (55) | Send Message
    US government never had a good energy policy going back to 40-50 years.
    Shale boom has come as a gift and the govt should make use of it with good policies to get economy growing.
    6 Jul 2014, 04:47 PM Reply Like
  • Bear Bait
    , contributor
    Comments (931) | Send Message
    Might want to keep an eye on Oil Company profits this earnings season.
    5 Jul 2014, 09:03 AM Reply Like
  • june1234
    , contributor
    Comments (4414) | Send Message
    As with all commodities paper and physical markets are not correlated .For decades the message has always been how positive for energy prices US becoming energy self sufficient would be on our pocketbooks. Here we are.
    5 Jul 2014, 09:22 AM Reply Like
  • BlackJack22
    , contributor
    Comments (2) | Send Message
    We should have moved onto more reliable, efficient alternative energy decades ago - this era of glorifying fossil fuel production is just yet another stark reminder of how backwards we are as a society with inept leadership that has so far been unable to make any hard choices in over 50 years.
    5 Jul 2014, 09:52 AM Reply Like
  • Rope a Dope
    , contributor
    Comments (708) | Send Message
    BlackJack - that may happen someday but the reality is there is no magic switch as some seem to believe. Here is a link to a great article by the International Energy Agency that indicates the world will need $48 trillion USD in investment between now and 2035 to maintain our current needs, and based on current technology. That sums is higher if alternate sources are to be considered.


    This is a long read, 190 pages, but is one of the best reality based reads on energy I have seen yet.


    5 Jul 2014, 11:29 AM Reply Like
  • chopchop0
    , contributor
    Comments (5218) | Send Message
    Great for TSLA.


    Long TSLA and oil pipeline and majors stocks. A good pair trade IMO on the rising price of oil
    5 Jul 2014, 10:52 AM Reply Like
  • Nicholas Chen
    , contributor
    Comments (2770) | Send Message
    How can this be a good pair trade when oil can double and a Tesla still won't be more affordable.
    5 Jul 2014, 02:47 PM Reply Like
  • chopchop0
    , contributor
    Comments (5218) | Send Message
    Because that makes the tsla even a better bang for the buck for those that can afford one.


    It's a no brainer to get a model S over comparable bmw, Porsche or mb sports sedans in the same category, especially considering how they all guzzle premium gas.


    And a cheaper model is coming....
    5 Jul 2014, 09:48 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (11225) | Send Message
    Imagine the billions of dollars in tax money accounts petroleum and natural gas exports would be able to fund to fix our bridges and repair our schools.


    ...or to hand out to "favored" nations or to fund wars of choice.


    Oh well...
    5 Jul 2014, 10:59 AM Reply Like
  • PalmDesertRat
    , contributor
    Comments (3798) | Send Message
    The profits I've made on my energy portfolio will more than pay for my higher gasoline and electricity costs for the rest of my life.
    5 Jul 2014, 11:19 AM Reply Like
  • wyostocks
    , contributor
    Comments (9115) | Send Message
    I agree. Six dollar gas is fine by me.
    5 Jul 2014, 02:23 PM Reply Like
  • miriam ledwith
    , contributor
    Comments (308) | Send Message
    Me too. And I use 93.
    5 Jul 2014, 04:55 PM Reply Like
  • Lakeaffect
    , contributor
    Comments (1466) | Send Message
    "Six dollar gas is fine by me" = Myopia & Greed. If it comes true, you will rue those words. You too, Miriam.
    5 Jul 2014, 06:47 PM Reply Like
  • chopchop0
    , contributor
    Comments (5218) | Send Message
    $6 gas has been a reality in other developed countries for years.


    We will do fine with it and it probably make consumers finally question the status quo for real this time
    5 Jul 2014, 09:50 PM Reply Like
  • Brian Auty
    , contributor
    Comments (5099) | Send Message
    I'm sure there are some economists out there who can explain the demand curve for oil. We saw what happened to NG prices when the flood gates opened.


    Pumping oil locally only makes sense at a certain price point and as long as the "world" price remains high, then we will drill like crazy here. Because we use so much imported oil, the local oil is simply being substituted at slightly less cost (but much greater value add). NG isn't imported, except from Canada and this makes our NG stranded here, hence the low price. Oil can be moved to where it's needed by pipeline or rail and so we are not seeing the price collapse as we did on NG.


    NG sells for quite a bit more around the world, so exporting it makes a lot of sense economically speaking.
    5 Jul 2014, 11:33 AM Reply Like
  • MisterJ
    , contributor
    Comments (1178) | Send Message
    Add oil independence to our nation soon too.
    5 Jul 2014, 12:11 PM Reply Like
  • SoldHigh
    , contributor
    Comments (991) | Send Message
    Title should be: "In spite of the EPA's and Obama's anti-US oil energy policies, U.S. becomes world's top oil producer."
    5 Jul 2014, 12:17 PM Reply Like
  • Hendershott
    , contributor
    Comments (1784) | Send Message
    SoldHigh; or the title could read "In spite of claims about Obama's anti-US oil policies, the US becomes the world's top oil producer." Some people wouldn't be happy if they got hung by a new rope.
    5 Jul 2014, 01:53 PM Reply Like
  • spald_fr
    , contributor
    Comments (2814) | Send Message
    Remember when Bill Clinton signed up with OPEC for crude at $25/barrel? People absolutely howled with displeasure.
    5 Jul 2014, 12:43 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (11225) | Send Message


    People are coming to realize that although Slick Willy wasn't exactly Reagan he sure was a lot better than B.O. at federal governance.
    5 Jul 2014, 01:00 PM Reply Like
  • Robin Hewitt
    , contributor
    Comments (5561) | Send Message
    You mean Nancy Reagan, right? Ronnie the Hollywood actor had alzheimers.
    5 Jul 2014, 05:40 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (11225) | Send Message


    Please link to evidence that President Reagan was diagnosed with Alzheimer's in 1981.
    5 Jul 2014, 05:50 PM Reply Like
  • Daniel5150
    , contributor
    Comments (267) | Send Message
    I am sure he can't provide a link
    More than likely he is B.O'S caddie on weekends.
    B.O. and Ronald Reagan are polar opposites.
    5 Jul 2014, 06:15 PM Reply Like
  • Petrarch
    , contributor
    Comments (1150) | Send Message
    gasoline is priced off brent not wti
    brent is the world oil price


    in the US light sweet crude is in oversupply and trapped and cannot get the world price - this is great for refiners but not producers.


    the oil market is interesting the imbalances of sweet light vs. sour heavy are causing some odd micro market issues


    the way to get lower gasoline prices in the US is to export the excess light sweet this will bring the brent market down - it will also allow more US oil to be developed as the price received will rise relative to what it is worth today to producers.


    US refiners who currently enjoy very nice margins buying underpriced "trapped" US light sweet will suffer but consumers will win - ultimately the US will also win as well as producers ramp up


    This is also the best way to punish Putin since Russia needs Brent about where it is now - any decline - and there would be a decline if the US oil flooded out would hurt rather quickly.


    To repeat - exporting oil is good for US consumers, good for the rest of the world bad for US refiners, bad for Putin and other producers who get priced off brent. seems counter intuitive but think it through.


    That is how the market actually works. I know this.
    5 Jul 2014, 03:12 PM Reply Like
  • evan.prospect
    , contributor
    Comments (704) | Send Message
    I'm ok with Putin, Iran, and Venezuela getting hurt by a lower brent price.


    Let's keep pumping and this helps too:


    6 Jul 2014, 02:28 AM Reply Like
  • aeroguy48
    , contributor
    Comments (905) | Send Message
    The Keystone pipeline from Canada would transport Heavy crude...
    6 Jul 2014, 06:59 PM Reply Like
  • machiavelli
    , contributor
    Comments (723) | Send Message
    "“Typically such a large energy supply growth should bring prices lower, but in fact we’re not seeing that because the whole geopolitical situation outside the U.S. is dreadful," says BofA’s head of commodities research."


    Maybe they should change this dude's title to BofA's head of hyperbolic and clueless morons.
    5 Jul 2014, 04:12 PM Reply Like
  • SoCalNative+(RIP)
    , contributor
    Comments (651) | Send Message
    Wow! What a zinger! What? Are you 12?
    5 Jul 2014, 07:43 PM Reply Like
  • machiavelli
    , contributor
    Comments (723) | Send Message
    Am I 12? Could you come up with something more original than that? Something remotely funny at least.
    6 Jul 2014, 02:24 AM Reply Like
  • leopardtrader
    , contributor
    Comments (3719) | Send Message
    People are just falling for the game of statistics. But not so soon WTI crude price could hit above $110 en route to $150/200 area. By then analysts would ever find another statistics based story to tell us. Oil price is going much higher. Demand is getting far higher than supply. Millions if not billions of people added to demand from China, India, Asia, Eastern Europe, South America, Africa and Arabia.. Next could be food scarcity that is pretty high inflation globally
    5 Jul 2014, 05:10 PM Reply Like
  • aeroguy48
    , contributor
    Comments (905) | Send Message
    Peak oil and peak food supply has been going on how many years?
    6 Jul 2014, 07:01 PM Reply Like
  • Doug Meeks
    , contributor
    Comments (1911) | Send Message
    Hell yeah! That's what happens when you raise the price of oil from $12 a barrel to $100. The U.S. is home to the best of the best and not just in the oil business.
    5 Jul 2014, 06:17 PM Reply Like
  • Kyle Spencer
    , contributor
    Comments (1240) | Send Message
    Taxes, 11-12%. Distribution and Marketing, 9-16%. Refining, 14-18%. Crude oil, 58-62%. Zone pricing, OPEC manipulation, gasoline market islands, speculation, ethanol, maritime law, rockets & feathers, and divorcement are also significant factors.


    5 Jul 2014, 10:20 PM Reply Like
  • Patent News
    , contributor
    Comments (1475) | Send Message
    oil prices in the U.S. should be lower. what's the problem?
    6 Jul 2014, 02:54 AM Reply Like
  • dplrx
    , contributor
    Comments (8) | Send Message
    Another factor is if your state continues to raise the state gas tax, you may not being seeing the benefit at the pump that some others are seeing. 13 states have raised their gas tax in the past 12 months while 24 states or so haven't raised them in 10 to 43 years!
    6 Jul 2014, 11:55 AM Reply Like
  • John Georgiou
    , contributor
    Comments (234) | Send Message
    United States Oil(USO) LONG for next week , more to http://bit.ly/TOSvxj
    6 Jul 2014, 01:16 PM Reply Like
  • psychological-dividends
    , contributor
    Comments (820) | Send Message
    I'm sure we can rely on the environmental lobby to try to restrain this energy miracle.
    6 Jul 2014, 02:09 PM Reply Like
  • BrianInMKE
    , contributor
    Comments (3) | Send Message
    We should not be exporting natural resources. There may be an abundance right now, but I'll lay you odds that in 10-15 years out we'll be blowing another $3,000,000,000,000 hole in our deficit on our next nation building exercise making the world safe for US natural resource supply chains... That is a horrible for our future generations and our US economy.
    8 Jul 2014, 08:47 AM Reply Like
  • PalmDesertRat
    , contributor
    Comments (3798) | Send Message
    What we ought to be doing is importing as much crude and storing it. In the grand scheme of things, the current boom in US production is a very short-run thing.
    8 Jul 2014, 10:20 AM Reply Like
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