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Page added on April 5, 2017

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China Becomes Biggest US Oil Buyer

China’s imports of crude oil from the U.S. quadrupled in February vaulting the nation past Canada to the top of the list of American Oil Customers. Bloomberg’s Stephen Engle reports on “Bloomberg Markets.”



20 Comments on "China Becomes Biggest US Oil Buyer"

  1. rockman on Thu, 6th Apr 2017 12:32 am 

    And here comes from the US MSM just as certain as the sun rising tomorrow. Here’s an example of the bullsh*t put out in all its glory on Reuters:

    “Exclusive: China buys first U.S. crude cargo since end of export ban

    China’s state-run oil refiner Sinopec Corp has purchased its first ever batch of U.S. crude oil for export, a source told Reuters on Thursday, a landmark transaction after the ending of a four-decade ban on domestic exports.

    {As documented here many times there has never been an effective ban on exporting oil from the US. Since the so called oil export ban law passed by the US govt we’ve exported almost 1.5 BILLION bbls of oil. And that stat is from the same govt that passed the ban law.}

    “The cargo, due to be loaded from a Gulf Coast port in March, may mark the start of a sustained flow of U.S. oil to China, the world’s second-largest buyer, which is eager to diversify its energy sources. Unipec, its trading arm, also has the advantage of leased oil storage tanks in the Caribbean, which could allow it to blend U.S. shale with cheap, heavy Latin American crudes for a bespoke mix ideally suited to its plants back home.”

    {Once Canadian dilbit enters the US it can be bought by any US refinery or any oil blending company that’s free to mix it the specification of any foreign buyer and export it. IOW reporting that X millions bbls of oil have been EXPORTED FROM THE US is not the same as reporting that X millions bbls of oil PRODUCED IN THE US have been exported. IOW blended oil shipped from Cushing to Texas export terminals is neither US or Canadian oil: it is the composite of what was mixed in the storage tanks at Cushing.

    BTW even the original export ban law had a provision that did not ban to reexport oil imported into the country}

    “While the first unfettered exports of domestic crude have already set sail to Europe, those cargoes are generally seen as one-off shipments by companies eager to make a point after fighting for two years to end the ban.

    {There was no fight against a nonexistent ban before President Obama official set the ban law aside last January. In fact, US govt records show that more oil was exported prior to his lifting the “ban” in one year during President Obama’s term then under any other POTUS in history}

    “Based on current U.S. and world prices, the cargoes do not appear profitable, traders said.”

    {Of course, its common for oil buyers to be willing to buy tens of $millions of oil at a loss. LOL}

    “The source declined to comment on any further details of the transaction, including the variety of crude, price or supplier. A Sinopec Corp representative said the company does not comment on specific deals.”

    {IOW no indication if any of the oil exported came from wells in the US or even if the company selling the oil was US or Canadian}

    “But it carries symbolic significance as the United States enters a new era of free oil trade after Congress moved with surprising speed and success last month to scrap the longstanding ban on most overseas shipments.”

    {Zero symbolic significance since there has always been free trade of US produced oil.

    But there a much more significant stat this bullsh*t MSM spin completely ignores: many times the volume of refinery products made from US has been exported then the volume of raw crude. In fact during 2016, before the first bbl oil was exported to China the US exported 74 MILLION BBLS OF REFINERY PRODUCTS to China. IOW US motor fuel consumers have been directly competing on a price basis with Chinese consumers as well as those in other countries. According to the EIA in January US refineries cracked 16.4 million bbls. But of that total 4.8 million bbls were exported.

    https://www.eia.gov/dnav/pet/pet_pnp_unc_dcu_nus_m.htm

    IOW when you see reports that the US “consumed” X million bbls per day understand about 30% of that “consumption” was exported.

    BTW neither the Rockman nor any of his oil patch cohorts oppose the exports of the oil or refinery products. Any dynamic that increases the prices to US consumers is A-OK with us. LOL.

  2. Cloggie on Thu, 6th Apr 2017 12:42 am 

    Off-topic: Daimler and Bosch to bring driverless car to market within five years:

    https://techcrunch.com/2017/04/04/daimler-and-bosch-fully-autonomous-cars-within-5-years/

    They have no choice as everybody else is doing it. But in the long term it means the beginning of the end of private car ownership, fewer cars with much higher occupancy rate. Especially younger people can defer the moment of private car ownership until the moment until they are really settled and certainly retired people won’t need to own a car at all. It is good for everybody except the car industry itself, that will sell decreasing numbers. It is good for the cities with less cars parked for 95% of the time and it is good for the environment as the same transport effort can be accomplished with fewer cars with less embodied energy. Commuting can be done by occupying cars with five rather than one passenger by applying intelligent algoritms to match supply and demand, allowing for small detours. Traffic jams will disappear as a consequence.

    Win-win.

  3. Nils Hellevig on Thu, 6th Apr 2017 5:55 am 

    Who cares about US export? 190% of US production is used in the US so that export is just a practicality/logistics. This is just spin.

    Nils Hellevig

  4. rockman on Thu, 6th Apr 2017 9:01 am 

    Nils – “Who cares about US export? 190% of US production is used in the US”.

    Earth to Nils…earth to Nils. An update: just since 2014 the country has exported almost 400 MILLION BBLS of oil from the US. Those exports reached the peak of 15.9 MILLION BBLS PER MONTH in July 2015. Much of it Eagle Ford Shale light oil tankered from the port of Corpus Christi in S Texas to eastern Canadian refineries where it was blended with their heavy oil imports.

    Of course, the US govt could be lying about those stats. LOL. And while the oil export number, 500 MILLION BBLS since 2014, seems big since that same year we’ve exported refinery products made from 5 BILLION BBLS OF OIL. That’s fossil fuel the US consumer lost access to.

    And the latest stat: in January the US exported 4.8 MILLION BBLS OF OIL PER DAY.

    https://www.eia.gov/dnav/pet/pet_move_exp_dc_NUS-Z00_mbbl_a.htm

  5. rockman on Thu, 6th Apr 2017 11:59 am 

    “And the latest stat: in January the US exported 4.8 MILLION BBLS OF OIL PER DAY”. More correctly stated: in January the US exported refinery products made from cracking 4.8 MILLION bopd.

  6. efarmer on Thu, 6th Apr 2017 12:08 pm 

    Well I for one am ready for a Trump Deal with China. We keep the refined products going that way, and in return, we get dirt cheap fireworks for the next 4 years. Something for us working class people in the Rust Belt. Think of going to the fireworks stand and dropping $20 on three big bags of pure pyro and still having a $100 or more for beer. Game Changer.

  7. BobInget on Thu, 6th Apr 2017 2:13 pm 

    Das right Rockman. Chinese ships are bringing crude, leaving with diesel. I’m reading everywhere, most of the world’s storage done been spent.

    As the moil said at the bris, ‘it won’t be long now’.

  8. makati1 on Thu, 6th Apr 2017 6:10 pm 

    Bob, I doubt the Chinese are bringing crude to the U$. They are just buying oily products. The U$ imports oil from oil exporting countries, not China. If I am wrong, send some refs I can check out.

  9. rockman on Thu, 6th Apr 2017 7:56 pm 

    Mak – Here you go:

    “How much petroleum does the United States import and export?

    In 2016, the United States imported approximately 10.1 million barrels per day (MMb/d) of petroleum from about 70 countries. Petroleum includes crude oil, natural gas plant liquids, liquefied refinery gases, refined petroleum products such as gasoline and diesel fuel, and biofuels including ethanol and biodiesel. About 78% of gross petroleum imports were crude oil.

    In 2016, the United States exported about 5.2 MMb/d of petroleum to 101 countries. Most of the exports were petroleum products. The resulting net imports (imports minus exports) of petroleum were about 4.9 MMb/d.

    The top five source countries of U.S. petroleum imports in 2016 were Canada, Saudi Arabia, Venezuela, Mexico, and Colombia.”

    And: “The top five destination countries of U.S. petroleum exports in 2016, export volume, and share of total petroleum exports

    Mexico — 0.88 MMb/d — 17%
    Canada — 0.87 MMb/d — 17%
    Netherlands — 0.29 MMb/d — 6%
    Brazil — 0.26 MMb/d — 5%
    Japan — 0.25 MMb/d — 5%

    Here’s the list of all countries the US has imported oil AND REFINERY PRODUCTS from:

    https://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_ep00_im0_mbbl_a.htm

    In 2016 about 7.8 million bbls of refinery products came from China. Less then the peak of 21 mm bbls in 1996. Prior to 1992 there were no imports from China. And from this EIA report you’ll see that no crude oil was imported from China.

    https://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_epc0_im0_mbbl_m.htm

    But as asked before: what’s the practical difference between importing 21 mm bbls of refinery products and 21 mm bbls of crude oil from China. Other then the products would cost the US more then the oil would.

  10. makati1 on Thu, 6th Apr 2017 9:03 pm 

    Thanks rockman. I forgot that the U$ might be importing refined products. You are correct about the exchange.

    “I’ll buy a barrel of your oil for $50 and sell it back to you as refined product for $500. Good deal, no?” LOL

  11. rockman on Fri, 7th Apr 2017 12:33 pm 

    Mak – As I’ve mentioned before the US has become the largest refined oil exporter on the planet:

    Below are the 15 countries that exported the highest dollar value worth of refined oil during 2015:
    United States: US$74.7 billion (12.3% of total refined oil exports)
    Russia: $65.6 billion (10.8%)
    Singapore: $42.1 billion (7%)
    Netherlands: $41.9 billion (6.9%)
    South Korea: $30.7 billion (5.1%)
    India: $30.5 billion (5%)
    Belgium: $24.7 billion (4.1%)
    Saudi Arabia: $24.1 billion (4%)
    China: $19.1 billion (3.2%)
    United Arab Emirates: $15.4 billion (2.5%)
    Italy: $13.1 billion (2.2%)
    Kuwait: $13 billion (2.1%)
    Germany: $12.4 billion (2%)
    United Kingdom: $11.5 billion (1.9%)
    Canada: $11.4 billion (1.9%)
    The listed 15 countries shipped 71 % of all refined oil exports in 2015 (by value).

    And here’s a great visual of chart that emphasizes what I keep say: how much crude oil the US export don’t mean sh*t compared to how crude oil we refine and then ship overseas. Three charts down. And notice the huge increase since 2006 when oil prices started to boom. So while our import deficit from oil imports increased significantly our trade surplus from product export boomed at the same time.

    http://www.ogj.com/articles/print/volume-114/issue-3/processing/us-refining-flexibility-sustains-export-opportunities-profitability.html

    Still looking for a list of our product importing countries. But I did see several years ago that Mexico used 75% of its oil export revenue to by refinery products from the US.

    Did find this about Canada. Not as much product exported to it as I thought:

    “Petroleum Products – Bilateral petroleum products trade with Canada is relatively balanced in both volumetric and value terms. Canada was the destination for 564,000 bpd of petroleum products in 2016, or 12% of all petroleum products exported from the United States.”

    See: it does “take a village” to f*ck up the environment. LOL.

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