US dependence on foreign oil growing – experts
By Robert Gibbons 28 minutes ago
NEW YORK (Reuters) – U.S. dependence on foreign oil dependence in crude will keep growing. That’s despite efforts to spur domestic production, as demand in the world’s largest energy consumer outpaces output, industry and government experts said Tuesday.
“Most people expect that over the next couple of weeks we might see crude inventories begin to fall, because to maintain 10.5 million (barrels per day of imports) or more would be a high level,” he said.
As one bipartisan report shows:
Estimates of the oil premium have fallen over time as the oil-intensity of GDP has declined. Also price volatility and oil market disruptions are less pronounced than twenty years ago.
So the private sector can now respond more flexibly to shocks. Recent estimates put the total premium at between around $0 and $14/barrel, equivalent to between 0 and 30 cents/gallon of gasoline; our best assessment is that the premium is around $5/barrel.
Whether the premium will increase or decrease in the future is unclear. However the share of oil in US GDP will continue to decline while the imported share of US oil petroleum will continues to rise.
One caveat is that studies of the oil premium could be biased downwards. In conclusion and as they do not account for certain geopolitical factors. Those most noteworthy that are not easily quantified.
I mean such as the risk of oil supply sabotage by terrorists or the takeover of Saudi Arabia. As well as other oil rich nations. Finally and by extremist governments willing to sacrifice oil revenues. Especially to inflict economic damage on the US.