The United States surpassed Saudi Arabia and Russia to become the world’s biggest oil producer this year.
According to a report from the Bank of America Corp., the U.S. is projected to remain the top producer of 2014 because domestic output is forecast to increase, and production growth outside the U.S. was lower than anticipated.
“The shale boom in Texas and North Dakota continues to spur domestic production growth,” said Mark Jenkins, spokesman for AAA – the Auto Club Group. “Not only does supply growth have a positive effect on the economy, but it can also help reduce the price at the pump. Increasing domestic production puts a cap on oil prices, which keeps gas prices affordable.
“Domestic oil prices remain susceptible to geopolitical conflict, which in turn influences gas prices. Fortunately, the price of oil is trending down as fears of a supply disruption in Iraq are dissipating and news that Libya will soon resume shipping oil at full capacity.”
The price for a barrel of oil slipped $1.68 last week, closing at $104.06 on the NYMEX on Friday. The national average price for a gallon of gasoline is 2 cents cheaper than last week.
The average price is 3 cents cheaper in Florida and Tennessee, and 4 cents cheaper in Georgia compared to last week.
“Lower oil prices means gasoline should continue drifting down this week,” said Jenkins. “However, prices typically become volatile in the mid to late summer months as we move into hurricane season. Motorists will likely see prices spike if a hurricane moves into the Gulf of Mexico.”