There was a quiet milestone made in October that American consumers are enjoying today. For the first time since 1997, more oil was pumped out from under U.S. soil than was brought in from overseas sources. This has been hailed as a triumph of American technology, ingenuity and engineering. New methods to find and coax oil and natural gas from American bedrock have led to a spike in U.S. energy production.
American producers are pumping 40 percent more oil domestically now compared to the summer of 2011. During that same time period, foreign oil imports into the U.S. have fallen by 18 percent. Prices at the pump, meantime, have fallen 12 percent. As we enter the new week, drivers are paying an average of $3.20 per gallon of gasoline. That’s close to a three-year low.
There are plenty of influences in what we pay at the pump: crude oil prices, the unemployment rate, the U.S. dollar and global politics. Each Wednesday, the U.S. Energy Information Administration releases a trove of data on energy production and prices. Watching this data will help make clear if this shift in energy supply influence will continue.
While American drivers have not reaped all the financial rewards of the resurgence of American oil, lower pump prices have helped provide support to the economy. As income growth has been stagnant, higher oil production and lower energy prices wind up right in the pockets of consumers.