Opec was the big market share winner as US crude oil imports rose in the first half of the year and for the first time since 2010.
The US government’s Energy Information Agency reported that overall imports rose by 7 per cent, or 528,000 barrels per day, up to June, with Nigeria and Iraq taking the largest share of the increase.
The EIA also reported that commercial crude oil stockpiles fell sharply last week, which helped propel oil prices higher yesterday, with world benchmark North Sea Brent gaining about 50 cents to an intraday high of US$52.32, up about 14 per cent since last week when Opec said it would try to reach a deal by the end of November to curb output.
“This increase reverses a multiyear trend of decreasing crude oil imports as a result of increasing US production,” the EIA said in its latest report on the industry.
Imports from Nigeria, Iraq and other members of Opec rose by 504,000 bpd, while imports from neighbouring Mexico fell by 118,000 bpd. But the higher imports have mostly displaced US domestic production, particularly from the shale oil sector, which fell to about 8.5 million bpd last month from a peak last summer of 9.6 million bpd.
The main factor behind the US output decline has been the collapse in oil price, in which Brent crude fell from about $115 a barrel in late 2014 to as low as $29 a barrel earlier this year – a 74 per cent fall – making a large number of shale producers unprofitable.
But the EIA also attributed the rising imports partly to changes in US law, which allowed domestic producers to export oil for the first time in 40 years.
“The narrowing differences between certain US crudes [prices] and international benchmarks provided an incentive for increased imports by refiners in areas where imported crudes now had a delivered cost advantage relative to domestic crudes of comparable quality,” the EIA said.
The Nigerian crude mostly went to refiners on the US east coast, such as the big refining hub in New Jersey, where ExxonMobil and others have large plants. That helped reverse a trend whereby US imports of Nigerian crude had fallen to 7,000 bpd during the first half of last year from more than 1 million bpd in 2010. Imports have risen in the first six months of this year to 186,000 bpd.
Imports from the Arabian Gulf have increased by 47 per cent over the last year, to 1.8 million bpd in July from a low last August of 1.2 million bpd, with the biggest increase from Iraq, followed by Saudi Arabia. The UAE exports most of its crude to Asia but it increased oil exports to the US this year by about 1 million barrels up to July, to 2.2 million barrels.
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