The US production of crude oil is at multi-year high and the country may take the helm as the world’s number one crude oil producer in a few years. The crude oil production boom is created by the technology that helps to extract oil from shale and more stable world crude prices. On the other hand crises in oil producing countries such as Libya drag down world production creating a huge demand for replacement supplies. Sanctions are curbing Iran’s production and sales. Turmoil in Nigeria and underinvestment in Venezuela are also contributing to the shortage. Worldwide, an estimated 3.5 million barrels a day are lost altogether due to these conditions. In addition to production increases in the US, Canada is also helping with increased production to stabilize worldwide supplies.
What will this do to the oil prices? The most common Brent crude oil prices are hovering around $100 a barrel. Daily price movements are very minimal and many think that the prices are stabilizing over the last three years or so. However, many oil analysts are predicting that supplies will be muted after the next five years and shortage of world crude oil will follow.