April trade data offered fresh evidence that the U.S. is starting to kick its foreign oil habit, according to an article published in the Wall Street Journal.
The value of imported petroleum, on a seasonally adjusted basis, fell to its lowest level in two-and-half years and, in terms of unadjusted volume, this was the weakest April for crude oil imports since 1995.
U.S. oil production has grown more than 26% in the past two years and, according to the U.S. Energy Information Administration, domestic production is expected to exceed imports later this year. With increasing domestic production of oil, imports are declining.
Although the demand for crude oil has remained relatively stable, there has been a dramatic increase in U.S. production the last couple of years. The wide-ranging effects of the downward import trend appear to be in the favor of both the U.S. economy and job production. It is also expected to push down prices of petroleum products.
Currently, the U.S. has more oil in storage than at any time since 1931, and oil stockpiles are the highest in more than 80 years, according to the Journal. Because of the U.S.'s plentiful supply, oil prices have been able to remain low at under $100 a barrel.
With news from CNN Money that the United States is expected to start exporting more natural gas regularly, prices of natural gas and oil are likely to converge. Because of the increasing natural gas supply available in the United States, about 20 companies are applying to export natural gas, and natural gas prices are expected to rise with the increase of exports.
To read the Wall Street Journal article on kicking the foreign oil habit, click here
To read the Wall Street Journal article on oil stockpiles, click here.
To read the CNN Money article on natural gas exports, click here