...AND CHEAPER...:

[T]he U.S. has so much crude that it is running out of places to put it, and that could drive oil and gasoline prices even lower in the coming months.

For the past seven weeks, the United States has been producing and importing an average of 1 million more barrels of oil every day than it is consuming. That extra crude is flowing into storage tanks, especially at the country's main trading hub in Cushing, Oklahoma, pushing U.S. supplies to their highest point in at least 80 years, the Energy Department reported last week.

If this keeps up, storage tanks could approach their operational limits, known in the industry as "tank tops," by mid-April and send the price of crude -- and probably gasoline, too -- plummeting.

"I'm not surprised we haven't seen production drop. Oil production lags oil drilling," says Severin Borenstein, a professor at University of California's Haas School of Business in Berkeley, adding that rig counts didn't begin declining until months into the price drop. "I am surprised we've continued to see increases in production, and I think that says something about how effective the technology is."

US crude output hit 9.23 million barrels per day in December, according to US Energy Information Administration data, more than any time since 1973. Production today is more than double the 3.98 million barrels the US extracted per day in September 2008, when the financial crisis threw oil prices and production - not to mention the rest of the economy - into a tailspin.

That production boom is partly what has pushed oil prices down more than 50 percent since last June. Over time, low prices could threaten the shale boom, analysts say, since shale producers require higher prices to turn a profit. So far production hasn't dipped, though, despite the fact that oil prices remain stubbornly low, particularly in the US. In fact, even with oil at $50 a barrel for the first half of this year, EIA expects crude production to rise from 8.6 million barrels per day in 2014 to 9.3 million barrels per day in 2015 and 9.5 million in 2016.

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