Low crude oil prices are finally starting to reduce American oil production.
The price of oil has fallen more than 70 percent since the summer of 2014 largely due OPEC’s output and a surge in American oil production from hydraulic fracturing, or fracking. This put more oil on the world market at a time when demand was falling, which drove down prices and gave oil producers less of an incentive to pump more out of the ground.
Source: Energy Information Administration
American oil production has therefore declined substantially to adjust for the new low prices, according to the Energy Information Administration. The U.S. produced an average of about 9.3 million barrels of crude oil per day last June. Oil production last year was 80 percent higher than it was in 2008.
The new oil production was good news for energy security, as America’s dependence on imported oil sharply declined. In 2005, America imported 60.3 percent of its oil. These days, the U.S. only imports 24.2 percent of its oil.
American oil industry experts at RBN Energy believe most new American oil production will be profitable at around $40 a barrel, but these days, oil prices are hovering around $30 a barrel.
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