I'm not sure what you mean by "the US used their own oil." If the private sector drilled for oil in the US, they would sell it at the market rate. The only way that could affect the price of oil would be if (1) the psychological effect drove oil speculation down or (2) the oil made available from such drilling hforced the global market down due to the added increase in supply. The remaining alternative would be for the government to mandate that private companies sell the oil drilled in the US for lower prices than available on the world market and that smacks of the same tactics as Hugo Chavez.
This is true, but what if the oil companies here were allowed to drill everywhere oil was found in the United States, open more refineries, and flood the market with a larger supply? Why not start out own version of OPEC with the US, Mexico, and Canada? Just wondering. I'm in learning mode here. I know the principles behind supply and demand and also recognize it isn't as simple as it would seem due to the many factors involved.
Besides, if you don't look at the dollar amount, and just focus on the profit margin, their profit margin is dismal. The whole dollar amount can't be used to form a position because, while Shell made 114 billion, everything else is relative.
You're correct in that it's not particularly simple. As I and others have noted in another post, the price increase in oil is in large part due to the decline of the dollar. When it looses value against other currencies, those selling oil, while not explicitly denominating in other currencies, do so implicitly by raising prices in dollars. There's also the speculation component that's been discussed extensively in the news, with immediate demand (and the possibility of interruption of supplies) influencing the price. There is virtually no surplus when you look at daily supply and demand. There is also rapidly increasing demand with India and China entering the industrial world.
Your observation about increasing supply (in any free market economy) is correct. If the supply is increased dramatically, then prices will decline. The advantage of finding it inside the US is primarily security rather than price, however, as American produced oil will be sold on the free market at free market prices.
Of all those things, however, this could dramatically lower the price...
Massive Oil Deposit Could Increase US reserves by 10x
America is sitting on top of a super massive 200 billion barrel Oil Field that could potentially make America Energy Independent and until now has largely gone unnoticed. Thanks to new technology the Bakken Formation in North Dakota could boost America’s Oil reserves by an incredible 10 times, giving western economies the trump card against OPEC’s short squeeze on oil supply and making Iranian and Venezuelan threats of disrupted supply irrelevant.
http://www.nextenergynews.com/news1/next-energy-news2.13s.html
