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The Energy Scoop – Deloitte Predicts Oil Self-Sufficiency in Ten Years

Deloitte’s Oil and Gas Survey predicts that the United States will become self-sufficient in oil within the next decade as investors quickly buy into oil price tracking funds at a fast rate. In addition, the EIA unveils their latest oil import tracking tool and industry experts forecast OPEC production cuts after a decline in Brent crude oil over the past week.

The Energy Information Administration recently introduced their new oil import tracking tool which allows users to monitor surges in oil production and changes in the amount of crude oil entering the U.S. “It is one part of EIA’s ongoing effort to assess the effects of a possible relaxation of current limitations on U.S. crude oil exports, which is another avenue to accommodate domestic production growth,” said the EIA. Since the steady decline of U.S. oil imports, reports indicate that the cost of gasoline is strongly tied to the price of international crude oil.

According to Bloomberg, investors are buying into oil funds at the fastest rate since the past two years. The four largest oil exchanged traded products listed in the country brought in $616.5 million in the past month. Despite the ongoing low prices of oil, investors believe that crude oil will rebound from the current market. “What we are seeing here is people betting on a return to normal,” said Dave Nadig, chief investment officer of ETF analysis firm, “There are a lot of investors that have a belief of a natural price for oil, and that natural price is substantially above the current level, he added.”

As Brent crude oil declined Wednesday, investors are forecasting the possibility of production cuts after OPEC produced over 30 million barrels a day for the month of October. Predicted production cuts remain the result of high oil production paired with slow economical price increases. “The likelihood of OPEC making a cut seems to be increasing. Taking just 500,000 barrels off the market would make a difference,” said Bill O’Grady, chief market strategist at Confluence Investment Management.

According to Deloitte’s “2014 Oil & Gas Survey: The Next Chapter of the Energy Renaissance,” industry experts believe that the United States will become self-sufficient in oil within the next decade. The survey indicated that these predictions are a result of the country’s high natural gas production levels and technological advancements in shale production among other key factors. “The recent shake-ups in prices, politics, and regulations provide a compelling backdrop to evaluate the responses provided in the survey; as the industry tests the waters with respect to shale’s resilience during a cycle of low prices,” said John England, vice chairman for Deloitte.