Posted June 13, 2014
America’s Shale Boom is Cushioning U.S. Gas Prices from Iraq Chaos
Business Insider: Brent oil futures briefly began approaching $115 this morning, the highest level in nine months, as fears that Iraq is disintegrating spooked markets.
Crude is now up about 4% on the week. When prices stay at this level for this long, U.S. gas prices start creeping up.
But what about all the oil the U.S. has been producing the last few years? Shouldn't we be insulated from whatever oil is doing?
Unfortunately, the answer is no. Gasoline prices are set on the global market, and refiners everywhere ship product to wherever they can get the best quote. So for better or worse, raw gasoline prices mostly move in lockstep around the world. The primary contract for gasoline is called RBOB.
But that doesn't mean there's been no impact from the shale boom. The net amount of crude the U.S. has added to global markets has resulted in one of the longest periods of oil price stability in years, and has helped push the broader trend down. This, along with subdued demand, is why U.S. gas prices have enjoyed low volatility in the last few years, averaging just $3.54 a gallon since 2011,according to FRED.
Read more: http://read.bi/1lhWpnK
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Marcellus Shale Continues to Defy Expectations, Driving U.S. Gas Production Ever Higher: http://bit.ly/1oXddGt
11 Maps that Explain the U.S. Energy System: http://bit.ly/1lhWzeR
ABOUT THE AUTHOR
Mary Schaper is a Digital Communications Manager for the American Petroleum Institute. She previously worked on Capitol Hill for the Senate Energy and Natural Resources Committee as Digital Director and for Senator Lisa Murkowski. Before coming to D.C., she spearheaded digital strategy for Murkowski's successful Senate write-in campaign in 2010. Schaper enjoys traveling and taking in the local culture alongside her husband, their son and loyal springer spaniel.