Deepwater oil and gas exploration would be allowed to proceed in parts of the western Gulf of Mexico as part of a budget compromise announced yesterday. Language in the legislation would implement a 2012 U.S.- Mexico Agreement concerning hydrocarbon reservoirs in parts of the gulf that cross the international maritime boundary. U.S. domestic crude production rose to a 25-year high as the combination of horizontal drilling and hydraulic fracturing, or fracking, unlocked supplies trapped in shale formations from Texas to North Dakota. Output from federal waters in the Gulf of Mexico will account for 17 percent of total U.S. production this year, down from 20 percent in 2012, government data showed. “It’s a step in the right direction and it will add to oil supply,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago . “It’s another reason that oil will be relatively cheap. The […]