Does U.S. oil boom mean lower prices at the pump?

The Wilmington ARCO refinery is seen before dawn.

The International Energy Agency says the oil fields of North Dakota are turning the global oil market on its head. Canada's oil sands, too, to be fair. The agency's latest report on world oil supplies says North America's oil boom is turning out to be even bigger than predicted. Within five years, the U.S. and Canada will be meeting most of the world's new oil demand.

Whoa. Wasn't it just a few years ago we were fretting about "peak oil?'

"It's very much a welcome change in the oil market," says Amrita Sen, chief oil analyst at Energy Aspects in London. "Simply because prices are already very high and without this sort of supply, arguably prices could be even higher."

Analyst David Pursell in Houston says if the IEA's predictions hold true (and they don't always) it's good news for the average American driver.

"Oil prices probably don't go up a whole lot more from here," says Pursell. "They probably don't go down, either, because it takes a high oil price to achieve this kind of growth. But what it says is you don't have to worry about $6, $7, $8 gasoline, and that should be a big relief."

The U.S. and Canada are displacing OPEC as the driver of global oil supply growth. Analysts say that means we're closer to energy independence than we've been in decades.

But that won't protect us from price swings, since oil's a commodity. It's sold on the world market to the highest bidder. Despite the U.S. oil boom, Saudi Arabia is still the world's largest producer. But the IEA expects the U.S. will overtake Russia for the number two spot in a couple years.

About the author

Sarah Gardner is a reporter on the Marketplace sustainability desk covering sustainability news spots and features.
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Oil is an evil that honestly should be conserved at the moment when new stock is found. Just purely harvesting everything now that they have new wells set up is going to have massive implications on not just the prices across the globe, but also the effect on the planet! With all the effort to go green these days, instead of trying to monetize and be such capitalists with this, they should be trying to feed a portion into storage and limit what it can be used for. http://www.supercheapstorage.com.au/storage-sydney/self-storage/storage-...

The average American is supposed to be happy that $7 gasoline has been averted ("suspended" is probably better) when each of us is already spending over $4,000 a year on gasoline, in a huge country where there are no options but to drive in many locations?

And an article that talks only about the oil coming from the shale plays is steering the reader wrong. Right alongside the oil we pump for an international market that sets its own price is natural gas that has very promising downstream fuel developments available and in process...and this natural gas cannot (yet) easily be put into global commerce. Natural gas is an important part of a domestic replacement fuel portfolio that will take us from the dirtiest transportation fuels, gasoline and diesel, through to renewables. For now we should look to the development of electric cars, methanol, ethanol (there's more to it than corn) and natural gas to leverage us away from oil, imported or domestic—and not just gloat that only our kids will be paying $7/gallon for gas.

The North Dakota most recent report shows a tiny increase in production (3000 b/d) with 135 new wells. B/D fell by 3 on all wells, down from 25% growth in late 2012. One trillion dollars have been invested, getting a poor return and costing 135 billion dollars to stay even. it is a real ponzie scheme and we end up with more Global Warming. People are dumb as yeast.

If this is Sarah garner's idea of "sustainability ,she should leave "public" radio and relocate to FOX news or join Larry Kudlow at the Business Channel. I would think that a "public"' radio program would have enough integrity to its stated principles, to temper its PR for the oil industry with with the fact that CO2 reached 400 ppm this month. Or that the oil boom may come at the cost of public health via the fracking process. Oh let's not forget the hazards associated with the tar sands oil of Canada as that filthy oil crosses the US in the proposed Keystone XL pipeline.Where's the PUBLIC in "public" radio?

While the oil boom is so gleefully reported, CO2 reached a landmark 400 ppm this month. Big kudos for all those who believe money justifies everything, including condemning future generations to an inhospitable planet. We need to talk about how markets will prosper as we, as quickly as possible, switch to renewable energies. A revenue neutral carbon tax, with the money coming back to Americans, would do the trick in this country. Could we have some balanced reporting here, please?

Mosaic, as long as "public" radio is funded by corporate underwriters ,don't expect the "balanced" ,"independent" reporting, they tout at every fundraiser.

You make it sound as if more oil is inevitably a good thing for us. What about its undermining our efforts to move away from fossil fuels and climate change? In reality, $7 per gallon for gasoline is the only way we will prevent major climate change.

You make it sound as if more oil is inevitably a good thing for us. What about its undermining our efforts to move away from fossil fuels and climate change? In reality, $7 per gallon for gasoline is the only way we will prevent major climate change.

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