And here is the explanation:
United States production has surged in recent years as the shale boom took off. That has helped create a glut of oil as major producers like Saudi Arabia continue to pump at high levels.
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It’s also a really good illustration of the importance of the concept of the margin in economic activity – the increase in U.S. oil production contributes just a small fraction of global output, but would appear to have an outsized impact.
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US production rose from around 5 million barrels per day in 2007 to around 9.2 million barrels per day now…global production has gradually climbed from 84 to 96 million barrels per day, with global growth in demand lagging that…net, the global surplus has been running at about 1.5 million barrels per day this year, with storage space running out, and now Iran will start exporting too…gonna be an interesting year…
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