U.S. could see crude oil production records by 2016, WSJ reports

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Will the price per barrel of oil be cheaper by the end of the decade? According to Ed Morse, head of commodity research at
Citigroup Inc.C
the price of a barrel could be $15 less than current levels by 2020. The United States is on track to reach records for crude-oil production by 2016, which “will weigh heavily on oil prices,” according to Morse. On November 12,
Reuters reported that the U.S. will surpass Saudi Arabia and Russia to become the world's top oil producer. Morse's views are echoed by those at the U.S Energy Information which projected that domestic natural gas output will grow strongly over the coming years to the point where the U.S could be a net exporter of fuel in 2018. The U.S. has shunned away from exporting oil since 1973 when the Organization of the Petroleum Exporting Countries (OPEC) stopped selling oil to the U.S as a direct result of its support of Israel. As the U.S. is expected to produce 9.6 million barrels a day in the coming years, Ken Cohen,Exxon Mobile Corporation's XOM vice president of public and government affairs feels the need to re-open the country's 40 year old policy on oil exports. The government needs to “rethink the regulatory scheme,” according to Cohen. Greater exports could enable companies like Exxon to sell its oil to the highest bidder as oil on many global markets command a premium. According to
The Wall Street Journal
, the gap could be as high as $12 a barrel. U.S. based oil companies will see its oil output slowly declining only after 2020 when the American oilfields will be past their prime and the Middle East oil heavy countries will regain their global dominance. “Advanced technologies for crude-oil and natural-gas production are continuing to increase domestic supply and reshape the U.S. energy economy as well as expand the potential for U.S. natural-gas exports,” EIA Administration Adam Sieminksi said in a statement. By 2040, the U.S daily production is expected to return to the current 2013 estimate levels of about 7.5 million barrels a day. Adjusted for inflation, oil prices will climb steadily to $128 a barrel in 2012 terms by 2035, according to EIA estimates.
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Posted In: News2020 oil projections2040 oil projectionsEd MorseEIAExxon MobileKen CohenOil outlookOPEC
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