America Is Swimming in Oil -- 4 Charts

Just sit right back, and let me tell you a tale about a man named Uncle Sam. You see, Uncle Sam is swimming in oil.

Now that you're ready to rip your own eyes out, let me tell you that I have a lot of charts and data below. And the last chart is a doozy.

Bloomberg tells us ...

Shale Boom Sends U.S. Crude Supply to Highest Since 1930s

The U.S. is stockpiling the most crude since the Great Depression, thanks to the shale boom that has boosted production to the most in 26 years.
Inventories rose 3.52 million barrels last week to 397.7 million, the highest level since 1931, according to Energy Information Administration data.

So why are oil prices so high? One analyst says that they could be higher, if not for weak demand.

“Although the market may think U.S. commercial crude is bursting at the seams, it is not — and at 397.7 million barrels, we are only 2.3% higher than one year ago,” said Richard Hastings, macro strategist at Global Hunter Securities. “The problem is on the demand side, which is quite weak.”

In other words, we're producing a lot more oil. But it's not cheap oil.

Sean's note. It seems that refiners are processing plenty of it. In fact, refinery utilization was at 91% for the latest week, up from, 88.8% a week earlier and up from 83.5% the same time a year ago, EIA data showed.

So why then did this happen ...

Gasoline Trades Near Eight-Month High as Supplies Drop

Gasoline inventories decreased by 0.3 million barrels to 210.0 million barrels. At 210.0 million barrels, inventories are down 7.8 million barrels, or 3.6% lower than one year ago.

So what's the problem?  The EIA says seasonal issues have a lot to do with it.

Typical seasonal factors contribute to recent rise in gasoline price

The EIA says: "Changes in the price of retail gasoline result from changes in both the price of crude oil and wholesale gasoline crack spreads. Crude oil prices do not display a seasonal pattern. Crack spreads for gasoline, however, are very seasonal. This post-February increase is largely related to typical seasonal factors such as refinery maintenance, increasing demand from driving, and the switch to summer-grade gasoline, which is more costly to produce than winter-grade gasoline."

Yeah, nice try.  But the real reason is that refiners are selling more and more product overseas. We can pump enough oil to drown Godzilla, but it won't matter if that oil is refined and exported.

You see, the EIA also says:
US petroleum product exports increased in 2013

US petroleum product exports in 2013 averaged 3.5 million b/d, up 10% from levels in 2012, according to the US Energy Information Administration. In December 2013, US exports of petroleum products reached 4.3 million b/d, the first time to exceed 4 million b/d in a single month.
Exports of distillate fuels in 2013 increased 110,000 b/d over the previous year to 1.1 million b/d, according to EIA data. This was accompanied by a 160,000 b/d increase in distillate fuel production in 2013 as the result of cost-advantaged US crude oil and natural gas and near-record-high refinery runs.

Here's a chart I made of US oil exports using EIA data. It goes through January (the latest month available).

Wait there are two more things you need to know.

First, the oil boom in Texas is big and getting bigger. In fact ...

Texas expected to outproduce all but one of the OPEC nations this year

Benefiting from the booming Eagle Ford Shale and Permian Basin, Texas likely will best the oil output of every OPEC country but Saudi Arabia by year-end, says a top exploration official at ConocoPhillips, a key acreage holder in both of those oil-and-gas formations.

The Lone Star State is expected to end 2014 with 3.4 million barrels per day in oil output, which exceeds that of 11 of the dozen OPEC nations.

Second, all that oil has to travel around the country somehow, right?

With Keystone delayed, oil by rail in DC spotlight

The story says ...

Delivery of oil by train has rocketed as the Keystone XL pipeline has been delayed for four years. It’s important to note that’s far from the only reason the transportation method for oil has boomed, as it also coincides with a boom in production here in the U.S., notably from the Bakken Formation in North Dakota.
According to data from the Association of American Railroads, U.S. carloads of petroleum products have more than doubled since April 2010, the first time the State Department delayed Keystone approval.

Slo who are we going to sell all this oil to? You get one guess, and it better start with "China". China is becoming more and more dependent on Middle East oil, and yet is unwilling to spend to protect that oil.

 The U.S., meanwhile, has less and less reason to protect Middle East Oil. So what's the easy solution? China can buy more of its oil from good ol' Uncle Sam. Maybe he'll be able to afford a new barrel.

This is all stuff to keep in mind as America's oil production booms.