The International Energy Agency said last week that the United States is likely to become the world's top oil producer by 2016, overtaking Saudi Arabia and bringing the nation closer to energy independence.
While it's been a widely held notion in the marketplace that increases in North American supply—meaning the U.S. and Canada combined—would bring about a sea change in the crude market, last week's IEA report noted that U.S. dominance will last for only four years.
So while the highly anticipated production surge will help reduce the West's dependence on OPEC output, how much does it really matter in the longer term? And is the IEA correct in its assumption that the boom in Texas and North Dakota oilfields will be past its prime by 2020?
"There are real questions about the longevity of the fields," said John Kilduff, founding partner of Again Capital. "The early going has seen rapid decline rates [in Texas and North Dakota] after about year two or three, which seems to keep the drillers on the move. The rapid advances and rise in production have moved the date forward as to when the U.S. becomes No. 1."