Gas Under $2 a Gallon Reported in Some U.S. States
Dear Wealth Watch Reader,
An estimated 100 million people hit the road, rails and air this holiday season.
It was a record amount of travelers by most assessments.
If you happened to travel via the roads this year, you may have enjoyed an early Christmas treat.
Cheap, cheap prices at the pump.
We’re talking under $2.o0 a gallon in some places, as confirmed by Wealth Watch’s own managing editor, who was traveling through South Carolina this weekend.
When he called me to report this (because in our work, we never really take a day off) I said, “Sean, I never thought we’d live to see those types of prices ever again…”
Oil Approaches an 18-Month Low
After a nice run-up that saw oil prices hit multiyear highs this fall, crude is tanking and now is nearing an 18-month low.
Reuters reported this morning the Brent crude index fell as much as “3.1%, to a low of $52.80,” while U.S. light crude slipped as much as much as “$1.30, to $44.92” in early trading today.
Some experts claim the stock market’s volatility as a reason for the drop in oil prices.
MarketWatch, for example, reported analysts at JBC Energy have stated:
“These dynamics are largely attributed to the stock markets as the Nikkei, as well as the Dow Jones, rebounded on Wednesday… However, the fear of [an equity] bear market remains in place, with the U.S. government shutdown not helping.”
There’s certainly some truth to equities volatility and swings in oil prices, but there’s a bigger, more important driver that needs to be discussed.
America’s New Dominance
America’s newly found domination in the oil game can’t be understated. And this new leverage among world energy providers is specifically due to increased yields from the Permian Basin.
Back in July, The Wall Street Journal reported:
“The number of drilling rigs now active in the Permian is the same as back in October 2011, yet the region is producing three times as much crude.”
Additionally, the Journal reported the Permian region alone ranked as the No. 4 oil producer in the world.
And earlier this month the Journal also noted:
“The U.S. became a net exporter of oil and refined fuels last week for the first time in decades, a symbolic milestone that would have seemed unthinkable just 10 years ago.”
This production surge is all thanks to technology.
In the past, oil rigs were assembled to tap one well at a time. When that well went dry the rig would be disassembled and moved to the next drill site. Now, using advanced technologies, drillers can set up one rig and tap multiple wells at the same time.
The amount of time and money saved by this new type of oil rig is incredible. Additionally, advanced AI-powered mapping equipment allows U.S. drillers to find new oil wells with pinpoint accuracy.
Reducing costs without impacting production is the perfect recipe for profits for U.S. oil companies in that region.
Here’s to growing your wealth,
Chief Income Expert, Mike Burnick’s Wealth Watch
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