Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

U.S. to Top Saudi Arabia’s Oil Production

U.S. to Top Saudi Arabia’s Oil ProductionSaudi Arabia has long been known as the world’s most dominant producer of crude oil, as the Middle East is rich with deposits of this fossil fuel. But the growth and rapid development of U.S. crude output has us on pace to dethrone Saudi Arabia in the not-so-distant future. We are currently on pace to average 10.9 million barrels per day for 2012, marking a 7% growth from the prior year and the largest single year jump since 1951 [for more crude oil news and analysis subscribe to our free newsletter].

“The Energy Department forecasts that U.S.production of crude will average 11.4 million barrels per day next year. That would be a record for the U.S. and just below Saudi Arabia’s output of 11.6 million barrels. Citibank forecasts U.S. production could reach 13 million to 15 million barrels per day by 2020″ writes Associated Press. Note that even with this output, we would still have to import a fair amount of oil, as our consumption habits dictate that we use around 18.7 million barrels per day, the highest in the world.

As technological advancements like fracking continue, our output will only grow, helping us reduce U.S. dependence on foreign oil. That combined with the improving fuel efficiency of cars on the road could put us on the path to being self sufficient as far as our fossil fuel addiction is concerned [see also Crude Oil Guide: Brent Vs. WTI, What’s The Difference?].

Investing in the Boom

While all of that is fine and dandy, what investors are really concerned with is how they can cash in on this trend to profit over the coming years. Below, we outline several options to help you position your portfolio for the U.S. oil boom.

  • Energy Select Sector SPDR (NYSEARCA:XLE): This ETF is one of the most popular energy products in the world, with more than $7.4 billion in total assets. The fund invests in oil and gas companies, 98% of which are domiciled inside U.S. borders. Some notable holdings of XLE include Exxon Mobil, Chevron, Apache, and Halliburton among others.
  • United States Oil Fund LP (NYSEARCA:USO): This ETF holds front-month W&T Offshore, Inc. (NYSE:WTI) futures and is among the most popular commodity ETFs on the market. Note that its strategy is not designed for a long-term buy and hold but rather for more active traders looking for a quick and liquid option [see also 25 Ways To Invest In Crude Oil].
  • Market Vectors ETF Trust (NYSEARCA:FRAK): This ETF invests in companies that are involved in “unconventional oil” operations like fracking and other newer technologies.

This article was originally written by Jared Cummans, and posted on CommodityHQ.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.