u.s. oil stockpile highest in more than 80 yrs

This is a concern as oversupply could lead to collapse in crude oil price...

For anyone still questioning whether the U.S. shale-oil boom is a historic reshaping of the U.S. energy market, today’s Energy Department report on domestic crude-oil stockpiles offers a striking statistic: The U.S. currently has more oil in storage than at any time since 1931.

Commercial crude-oil stockpiles rose to by 3 million to 397.6 million barrels last week, the Energy Department said in its weekly Petroleum Status Report. Oil stockpiles are up 10% since the start of the year and 30% since May 2008.

All that extra supply has kept U.S. oil prices under $100 a barrel even as prices overseas remain in triple digits. (Nymex crude-oil futures were recently 33 cents higher Thursday, at $93.46 a barrel, supported by a jump in gasoline demand.)

The source of the new supply: North Dakota, the Eagle Ford shale in South Texas and the Marcellus formation in Pennsylvania, areas where hydraulic-fracturing drilling technology has sent output surging. North Dakota produced 783,000 barrels a day in March, a seven-fold increase from the 115,000 barrels a day the state produced at the end of 2006. Texas oil production has nearly doubled in the past six years, and is at the highest level since 1989.

There’s a surprising historic parallel between the high supply levels today and stockpiles in 1931. In both instances, a massive new source of domestic production overwhelmed the U.S. market. According to Daniel Yergin’s The Prize, in 1930, aging wildcatter Columbus “Dad” Joiner discovered the East Texas oil field in Rusk County, Texas, which would prove to be the largest oil reservoir in the contiguous U.S. After producing virtually nothing just a few years earlier, by 1931, the field produced 500,000 barrels a day, and sent oil prices in Texas plummeting from over $1 a barrel to six cents a barrel.

While we’re at it, here’s a quick primer on what things looked like the last time the U.S. had this much oil on hand:

Herbert Hoover was President of the United States, which according to the Census Bureau had a gross-domestic product of $76.6 billion, or $703.6 billion in 1996 dollars. Comparatively, U.S. GDP in 2012 was well over $15 trillion (in 2012 dollars). Roughly 124 million people lived in the U.S., less than half of today’s population. 24 million motor vehicles were registered in the U.S., compared to roughly 250 million in 2010. Oil traded at 65 cents a barrel, about $10/bbl in today’s dollars. The St. Louis Cardinals won the World Series over the Philadelphia A’s.