UNITED STATES OIL PRODUCTION ON PACE TO SURPASS SAUDI ARABIA
With new technologies and higher prices the U.S. output is going to surpass the Saudies sometime within the next two years,2012 is on pace to be the biggest one year increase since 1951, we have been averaging 7% increases over the last four years, the boom has surprised even the pundits who have been real critical of the Obama administration of showing favoritism to the green energies over the crude oil business. The Energy Department predicts that our oil production next year will be just over 11.6 million barrels per day,which is what Saudi Arabia is producing every day right now.Some of the experts think we could get to 14 to 15 million barrels per day ,which would make us the new Middle East.But, we will still have to import oil,our peek needs right now is just a little over 18 million barrels per day. Even though our production is at an all time high it has not led to cheaper prices at the pump,but one year ago all of the pundits were warning us to brace ourselves because they thought that with an election year the price of a gallon could get to $4.50 to $5.00 per gallon,and this was because they thought this administration was anti "big oil". Predicting the price of a gallon of gasoline 6 months to a year in advance is a lot harder than people think.
The increase in drilling is a boom to the local economies,the states that are getting the benefit right now are North Dakota, Oklahoma, Wyoming, Montana and Texas.The national unemployment rate is around 7.8 %,the unemployment rate in those five states is 5.2 %, that is a huge difference. All of the businesses in those areas benefit, it has been reported that the increase in the drilling,transportation and refining has created 1.3 million new jobs.The biggest factor that is driving the domestic production is our new found ability to squeeze oil out of the rock that used to be to difficult and expensive to get.That process to pump water,sand and chemicals into the well is known as "fracking" Their is no doubt that it works,but their is a concern that it might contaminate the under ground water supplies.
ECONOMIST ARE FORECASTING 2013 TO BE LESS PAINFUL THAN 2012
According to the USA TODAY,s quarterly report most of economist surveyed felt that 2013 was going to be better than 2012, not a lot better but better.But they all premise their predictions on the fact that Congress does not hinder the growth,that’s akin to being the Monday morning quarterback on Thursday.Their forecasts have the economy growing at an average rate of 2.3 percent,that is up from the 1.65 percent we are doing now, anything over 3% is considered good.The current unemployment rate is 7.8%, next year the prediction is the unemployment rate will average 7.6% for the year.Business investment growth estimated at 4.6% is expected to be at 7.5% next year,the Fed has agreed to continue buying mortgage backed securities until the job market improves and will keep short-term interest rates low. All of the economists surveyed thinks that the deficit needs to be reduced,but just like our Congress they cannot agree as to how or when.One of the unintended consequences of the economy improving is an influx of illegal Mexicans coming across the border,this is according to a report completed by the University of Southern California and a Mexican government research group that said for the first time since July of 2007 the number immigrants heading north is more than the number heading south.