Energy Sector 2 Revised

Boom in the U.S Oil Supply
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Boom in the U.S Oil Supply
Summary
The oil sector seems to have endured the tumultuous episode experienced in the market recently. Private oil companies have employed technology to help unlock oil in previously unexplored areas contributing to the resilience. Their efforts have received a boost from the acquisition of the necessary financial backing. Consequently, there has been an increase in the US oil production as well as the export margins. Moreover, natural gas has emerged as a new front giving the country impetus in the energy sector (Krauss, 2018). The government is aiding these efforts by increasing offshore drilling and loosening bottlenecks regarding restrictive regulations. As a net result, the dominance of Saudi Arabia and Russia as oil and natural gas leading suppliers has encountered stiff competition.
Explanation
The market force under scrutiny in this article is supply. That is the supply of oil to the global market from the U. S. and its key competitors, such as Saudi Arabia and Russia. Comparatively, as the quantity of oil supply from the U.S. continues to grow, the quantity of oil supply from its competitors continues to slump down. Meaning, for the U.S., the supply curve shifts outwards indicating a growing trend. However, for its rivals, the supply curve shifts inwards, indicating a shrinking trend. This change happens due to two factors. One is the increase in oil prices, which translates into an increase in the cost production, and two is the technological improvement.

Unlike other oil-producing countries, U.S seems to have the best production technologies, increasing its oil output as indicated by the outward shift in its supply curve. The U.S. is, therefore, willing to sell more oil barrels at relatively reduced prices, unlike its competitors, giving it an edge.
Graph

Figure SEQ Figure * ARABIC 1: Increase in the U.S oil Supply
Reference
Krauss, C. (2018). Oil Boom Gives the U.S. a New Edge in Energy and Diplomacy. The New
York Times, Retrieved from https://www.nytimes.com/2018/01/28/business/energy-environment/oil-boom.html?rref=collection%2Ftimestopic%2FGasoline%20Prices&action=click&contentCollection=timestopics&region=stream&module=stream_unit&version=latest&contentPlacement=2&pgtype=collectionGraph: US Oil Production
Oil Production (million barrels per day)
    2015 2016 2017 2018 2019
Crude oil 9.408 8.857 9.298 10.274 10.848
Natural gas 3.342 3.509 3.714 4.207 4.572
Ethanol 0.966 1.003 1.032 1.034 1.032
  Biodiesel 0.082 0.102 0.105 0.117 0.128
Energy Outlook, January 2018.