IEA Report

I should have mentioned this story when it was originally released.

Bloomberg:  US Oil Output To Overtake Saudi Arabia's By 2020

"U.S. oil output is poised to surpass Saudi Arabia’s in the next decade, making the world’s biggest fuel consumer almost self-reliant and putting it on track to become a net exporter, the International Energy Agency said."

Here is a summary of the EIA report

"The WEO finds that the extraordinary growth in oil and natural gas output in the United States will mean a sea-change in global energy flows. In the New Policies Scenario, the WEO’s central scenario, the United States becomes a net exporter of natural gas by 2020 and is almost self-sufficient in energy, in net terms, by 2035. North America emerges as a net oil exporter, accelerating the switch in direction of international oil trade, with almost 90% of Middle Eastern oil exports being drawn to Asia by 2035. Links between regional gas markets will strengthen as liquefied natural gas trade becomes more flexible and contract terms evolve. While regional dynamics change, global energy demand will push ever higher, growing by more than one-third to 2035. China, India and the Middle East account for 60% of the growth; demand barely rises in the OECD, but there is a pronounced shift towards gas and renewables."

The new supply is coming predominantly from application of hydraulic fracturing technology

WSJ story

When the story initially came out it ran across the tickers of the financial news channels as something like "US to surpass Saudi Arabia in oil production"

However  two weeks ago EIA downplayed the significance of the story.   The exact date when and if the US surpasses Saudi Arabia will depend on exactly which products you include in the count.  Saudi Arabia will still remain the only country with substantial spare capacity - they will continue to be the big player in the world responsible for cushioning supply and demand shocks.  Finally, despite the above two caveats the fact that the US has greatly increased its oil and gas production will be a boon to the US economy, will reduce US energy imports which should strengthen the dollar, and should help reduce the world price of oil.  So it is still a significant story - just not in the way that it was initially presented.