Courtesy of Pam Martens.
Yesterday the International Energy Agency (IEA) delivered a stunning research study showing that a shale-oil bonanza in the United States would assist it in overtaking Saudi Arabia as the world’s largest oil producer by 2020. In two decades, the U.S. would become largely self-sufficient as an energy producer.
According to the report:
“Energy developments in the United States are profound and their effect will be felt well beyond North America – and the energy sector. The recent rebound in oil and gas production, driven by upstream technologies that are unlocking light tight oil and shale gas resources, is spurring economic activity – with less expensive gas and electricity prices giving industry a competitive edge – and steadily changing the role of North America in global energy trade. By around 2020, the United States is projected to become the largest global oil producer (overtaking Saudi Arabia until the mid-2020s) and starts to see the impact of new fuel-efficiency measures in transport. The result is a continued fall in US oil imports, to the extent that North America becomes a net oil exporter around 2030.”
That was startling news but even more surprising was the stock market’s reaction – it didn’t budge. The Dow Jones Industrial Average closed unchanged on the day.
But surely one of the energy stocks with heavy involvement in shale production would get a price boost – like ConocoPhillips, for example. The stock (symbol: COP) closed down 3 cents at $55.64 on the day.
What about the U.S. Treasury market. Wasn’t there a big relief rally that all that extra tax revenue from all that extra oil production would help reduce the national debt. Nothing there either: the 10-year Treasury has traded in a narrow range for the past week, yielding around 1.60 percent.
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