3 Important Charts on Oil and the Current Account Deficit

Here are three charts everyone should be aware of.

First, look at what happened to the current account deficit. Sure, it's still at $81.12 billion. But it's alsoat the lowest level in 14 years.

Source

In fact, the current account deficit has narrowed 20% in the past year alone!

Now, what has changed that could be causing that? Well, I've talked in previous posts about how U.S. crude oil production is booming. The fact is, The U.S. produced an average 7.455 million bpd in 2013 -- the highest since 1989. It was also the largest annual increase since 1859 - the start of US commercial oil production.

We can't use all of that oil. A lot is refined and turned into petroleum products for export. Let's hop on over to the Energy Information Administration and check out the latest chart of US petroleum exports ...

Here is the EIA data on that

Net petroleum imports fell last year to only 33% of oil consumed, the lowest dependence on foreign sources of petroleum since 1985.

And the more oil we produce, the less we need to import. So, here's a chart from the March Economic Report of the President ...

We are turning the tables on OPEC. And yes, the White House "all of the above" energy policy has a lot to do with it.

What about the Keystone Pipeline? That's a distraction -- it's mainly about oil company profits, because that would transport more oil to refineries on the coast to be turned into product for export. To be clear, this is not oil that is likely to be used here in the U.S. However, the more product that is produced and exported from those refineries, the lower our current account deficit is.

Just something to keep in mind.