Recently, I had the privilege of appearing on ‘Countdown to the Closing Bell,’ Liz Claman’s program on Fox Business. When asked if I was nervous that stocks are heading too high, I said that I’m very bullish. All around the world, exports are up, GDPs are up and the global purchasing manager’s index (PMI) is up.
Oil prices continue to remain low, however, thanks in large part to the ingenuity of Texas fracking companies. As I told Liz, this has served as a multibillion-dollar ‘peace dividend’ that has mostly helped net importing markets, including ‘Chindia’ – China and India combined, where 40 percent of the world’s population lives – Japan and the European Union.
I can’t emphasize enough how impressive it is that Texas shale oil producers continue to ramp up output even with crude remaining in the $50 per barrel range.
This underscores their efficiency and innovation in drawing on oil reserves that were largely out-of-reach as recently as 10 or 12 years ago. What’s more, common law property rights here in the U. S. benefit mining companies in ways that simply can’t be found in Latin America and other parts of the world that operate under civil law.
According to the Energy Information Administration’s (EIA) most recent report on drilling productivity, total U. S. shale oil output is expected to climb above 6 million barrels a day for the first time in September. The biggest contributors are Texas shale oilfields, which will exceed 4 million barrels a day. West Texas’ Permian Basin alone represents nearly 400 percent of these gains, according to research firm Macrostrategy Partnership.
This post was published at GoldSeek on Tuesday, 26 September 2017.