US gets rid of oil addiction as price plummets

SAN FRANCISCO: The US is producing the most oil in 31 years, economic growth is picking up and crude prices are plunging. So why is Americans' use of petroleum waning?

As the US moves closer to energy independence, greater fuel efficiency, changing demographics and an increase in renewables are altering the dynamic that in the past would have seen demand for gasoline climbing.Gross domestic product, the value of all goods and services produced in the US, grew at a 2.4% pace in the third quarter from the year-earlier period. Oil consumption fell 0.3%, government data show.

“Oil demand and GDP growth used to go hand in hand,“ Christopher Knittel, a professor of applied economics at Massachusetts Institute of Technology's Sloan School of Management, said.

“Now, they're in some ways almost independent of each other because of investments in fuel economy that tended to break the link.“

The shale boom has driven US output to the highest on a weekly basis since 1983, with oil production up 65% in just five years and the country supplying 89% of its own energy in 2014.