According to research done by Bank of America Merill Lynch, America has surpassed both Saudi Arabia and Russia in the production of crude oil and liquids separated from natural gas in the last six months. Since 2008, US oil production has grown over 70% while liquefied natural gas output has advanced 40% since 2005. In 2010, the US became the world largest natural gas producer.

In the first quarter of 2014, the US produced a daily output of over 11 million barrels. The recent influx of oil production is in part due to the soaring rates of extraction from shale formations in Texas and North Dakota. To extract the oil, the companies must break underground rocks with a high-pressure liquid, other known as hydraulic fracturing or fracking. Despite the local production, the US is still the worlds largest oil consumer and it imported an average of 7.5 million barrels a day of crude oil in April 2014.

According to IEA the US oil output will grow to 12.1 million barrels a day in 2019 before reaching a plateau in the 2020’s. The IEA also believes that the US will remain the world’s top producer until the early 2030’s.

Meanwhile, the political unrest in Iraq is threatening the country’s massive oil output, while Libya’s exports have been disrupted by protests and Nigeria’s crippled by theft and sabotage. The growing American oil industry will undoubtedly have far-reaching political effects as the US becomes energy independent. Economically, the recent news will likely leave its own mark in the stock markets. To see what I Know First is predicting about crude oil and other commodities click here.