SAN FRANCISCO (MarketWatch) — Somewhere in the barrage of oil market-moving news and monthly reports released this week we almost missed it: oil independence for the U.S. isn’t just a dream.

The biggest clue might have come from the Energy Information Administration’s Short-Term Energy Outlook report, which said that U.S. crude-oil production in August hit the highest monthly level in 24 years.

That's a major step toward the energy independence the U.S. has been aiming for and may point to a future surplus of oil in the global market.

The EIA also said domestic oil production is on track to score the biggest annual growth in the history of the U.S. oil industry — poised for a climb of 15.1% to 7.47 million barrels a day this year.

So far this year, U.S. government data show that the nation has met 87% of its own energy needs, according Charles Perry, chief executive officer at energy-consulting firm Perry Management.

He views current drilling activity as “stable” and expects it to last in the range of 10 more years, barring any external factors. Most importantly, “there is far more potentially productive oil shale in the U.S. than any of us in the industry even dreamed existed,” Perry said.

So if the current drilling rate continues, the U.S. “should be near zero on oil imports in 10 years, plus or minus,” he said.

That’s quite a turnaround. Not that long ago, oil independence was not a sure thing.

And on a more global scale, with reductions in U.S. imports, there is likely to be “a surplus of oil in the future, unless developing countries can use up this surplus,” Perry said.

Progress

The boom in U.S. production is already making a big difference.

Three monthly oil reports released this week, from the EIA, OPEC and the International Energy Agency (IEA), confirmed a sizable production climb from non-OPEC oil producers, which include the U.S., and that helped to offset output losses from Libya, Syria and others.

The latest monthly reports from the EIA and the Organization of the Petroleum Exporting Countries both “acknowledge the incredible boom in U.S. production and how it is changing the global energy landscape,” said Phil Flynn, senior market analyst at Price Futures Group.

“OPEC may be worried about weakening demand but, at the same time, any thought of production cuts will have to be balanced with a risk to their market share,” he said.

Saudi Arabia has always been known as the swing oil producer, one that has the means and ability to step in and make up for any shortfalls in global output in the event of a significant drop elsewhere.

But Saudi Arabia had help in that role. It was “robust supply gains in Saudi Arabia and North America” that compensated for the sharply lower production numbers from Libya, Syria and much of the North Sea in August, according to Matthew Parry, senior oil analyst at the IEA.

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Concerns over supplies in the Middle East, with ongoing geopolitical uncertainty in Syria, oil disruptions in Nigeria and political instability in Libya and Egypt, contributed to a nearly 3% rise in oil prices CLV23, in August.

“Short-term geopolitical tensions, of course remain a concern, but overall the market fundamentals look reasonably secure,” Parry told MarketWatch.

Weakness in prices recently show that. As of Thursday’s close on the New York Mercantile Exchange, October crude futures prices lost about 1.8% week to date.

“New North American [crude-oil] production ... continues to surge,” according to an IEA report released Thursday. The agency expects non-OPEC output in the third quarter to see a quarter-on-quarter rise of 520,000 barrels per day, in part because of North American growth.

While North American output includes Canada and Mexico, it’s U.S. growth that’s contributing the largest change to the global oil trade, analysts said.

Shale and transport

The U.S.’s growth in oil production has a lot to do with the so-called shale revolution.

“ ‘The U.S. oil boom is only in the second inning of a nine-inning ball game.’ ” — Mark Williams, Boston University

“The U.S. oil boom is only in the second inning of a nine-inning ball game,” said Mark Williams, a former energy trading-floor executive in Boston who teaches finance at Boston University.

“The shale revolution in North Dakota’s Bakken and Texas’ Eagle Ford field has completely changed the supply picture with the U.S. soon surpassing Saudi Arabia in daily production,” he said. “It is remarkable how quickly the rich shale reserves have tilted the balance of oil power towards the U.S.”

Byron King, editor of investment newsletter Outstanding Investments, said the U.S. is producing “about 2.5 million barrels per day more than just a few years ago, thanks to fracking.” Fracking uses a high-pressure mixture of water, sand and chemicals to blast apart layers of oil and gas-bearing rocks, such as shale, to release hydrocarbons trapped in them.

The U.S. has worked hard toward achieving energy independence. Shutterstock

That domestic production has displaced equal amounts of imports, said King.

U.S. imports from Angola and Algeria have “all but vanished,” and Venezuelan and Nigerian imports are “way down,” he said. That oil now flows elsewhere, thus competing against Saudi oil.

And the oil not going to the U.S. competes with the Brent crude UK:LCOV3 market, “keeping a downward pull on world prices.”

Year to date, tracking the most-active contracts, Brent crude futures, which has been considered more of a global oil benchmark, are up less than 1%, while Nymex West Texas Intermediate crude has gained about 16%.

But Nymex oil finished last year with a loss of roughly 7%, while Brent added 3.5%.

A large part of the reason for Nymex oil’s underperformance last year was the glut of oil at the storage hub for WTI crude at Cushing, Okla. After all, what good is all that oil if the nation lacks the infrastructure to bring it where it needs to be?

But OPEC’s monthly report showed that crude oil is finally on the move, with oil at Cushing showing significant declines.

OPEC said stocks there fell to around 42 million barrels by the end of July from about 52 million barrels at the start of the year.

“In recent months, there have been several efforts to move oil by rail,” said Perry of Perry Management, with many new loading and unloading terminals being built.

King said “thank U.S. and Canadian railways for meeting the logistical challenge.”

Both U.S. pipeline and rail transport capacity continues to expand and accommodate production growth, with the country adding about 500,000 barrels per day of crude-oil pipeline capacity this year, according to the IEA report.

In many ways, railroads have taken the place of pipelines for transport, said King. It costs more, but there are “more efficiencies than a lot of people thought in the olden days of two or three years back.”

It’s a big change too. U.S. infrastructure was “set up over the past 50 years to import oil, refine it at the coasts and send product inland,” he said. “Now we have to reverse some of that and produce oil mid-continent, send it to [the] coast for refining, then reverse flow back to consumers.”

So far, though, “it’s all working,” King said.