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Page added on December 7, 2017

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The Drastic Drop Off In US Oil Imports

Consumption

While the dust may now have settled on last week’s OPEC meeting, the cartel’s impact on U.S. oil inventories is set to linger on. Stocks are at their lowest level since January 2016, and are down over 80 million barrels from their peak in March – in spite of a 30 million barrel injection from the SPR.

As we head into the holiday season, the U.S. should expect little in the way of holiday cheer from OPEC flows.

U.S. imports of OPEC crude have averaged 3.26 million barrels per day through the first eleven months of this year, a smidge higher than last year’s average.

Although imports started out the year at 3.7mn bpd in January, the highest monthly level since 2013, we have seen them dropping below the 3mn bpd mark in recent months – led by a significant drop in deliveries from Saudi Arabia.

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After achieving monthly year-over-year gains since late 2015, OPEC imports to the U.S. dropped to a deficit in July. The deficit has been maintained over the four months since – although the YoY drops in August and September were exacerbated by hurricane-induced disruptions. Related: Fear Will Drive Oil Prices Higher In 2018

October and November imports have rebounded close to the 3mn bpd mark, but not enough to help imports clamber back to a year-over-year surplus. As for this month, December’s OPEC imports are almost certainly going to finish at a deficit to last year’s level, given a pre-OPEC-production-cut-deal ramp-up last Yuletide.

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Saudi arrivals rebounded in November, but by no means to the level witnessed in recent years.

In late October, we went ‘Back to the Future‘, highlighting how Saudi crude imports to the U.S. dropped below the level of Iraqi imports for the first month since 1984 (teeing up the movie reference).

We have seen Saudi imports just edge out Iraqi flows in November, but this tussle looks set to persist – as Saudi shows OPEC compliance discipline via lower exports, while Iraq does not. (n.b. the U.S. doesn’t receive crude from northern Iraq, where flows have dropped – only from Basra, in the southern part of the country).

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We spoke about lower Venezuelan crude flows to the U.S. last week. But we have also seen lower NAF and WAF (North African, West African) flows in the last month. Imports from Angola have dropped off, as it has favored sending crude to its leading destination, Angola, instead.

Libyan imports have dropped off too, sending higher flows to Europe and Asia instead, while Algerian loadings of Saharan blend bound for the U.S. were completely absent in October – for the first month since January 2015 – also favoring Asia.

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By Matt Smith

oilprice.com



5 Comments on "The Drastic Drop Off In US Oil Imports"

  1. Antius on Thu, 7th Dec 2017 5:38 pm 

    Ahh. That musky, damp smell of global recession hangs in the air. It smells poor people.

  2. Boat on Thu, 7th Dec 2017 10:59 pm 

    Antius,

    World demand for oil is strong and growing as it has been for years. Same with Nat has.

  3. deadlykillerbeaz on Fri, 8th Dec 2017 1:45 am 

    https://en.m.wikipedia.org/wiki/List_of_oil_refineries

    Lots of oil refineries all over the world.

    When there are what some 85 million barrels of crude refined each day, you need at least 200 refineries refining crude oil that can process 425,000 bpd each.

    200×425,000=85,000,000

    400 refineries at 212,500 bpd refining capacity.

    Giant refineries, one in India and one in Venezuela.

    When you can refine 85,000,000 bpd or something like that, there is demand.

    Oodles of refineries everywhere, all because of demand. The Saudis can pick and choose.

    You gotta have millions of cars and trucks on the move all of the time and there are. It is a worldwide phenomenon and problem, too much demand too much oil being burned frivolously, obscene profligacy.

    Then you have the Idiot-in-Chief burning jet fuel like crazy to drink a glass of wine with other idiot rulers across the Asian complected world.

    The poor President doesn’t know if he is afoot or horseback after a year of Trump being skinned alive, the real agenda is to have him drawn and quartered, poor guy is being picked on constantly. You gotta feel sorry for the imbecile.

    Back to reality.

    Internal combustion engines dominate.

    It’s not rocket science.

    Those California refineries are going to crank out gasoline and diesel fuel, the driving will be non-stop up and down I-5 night and day. That’s California Dreaming, dream on.

    Driving is serious business, wear your seatbelt everywhere you go and don’t drive drunk.

    Happy motoring!

  4. pointer on Fri, 8th Dec 2017 6:59 am 

    If my sources are correct, US demand for gasoline and other petroleum-derived fuels was pretty soft in 2017, all while the US and Canada still were cranking out debt-subsidized low-EROEI crude. Thus lower OPEC imports would be no surprise.

    Agreed, Antius, the smell of poor people is beginning to waft over the land. I grew up in Appalachia, and sometimes return just to mourn the changes. My town’s only grocery store closed recently (the nearest one now is a 20 mile drive), and the hardware store started 60 years ago will be closing soon. The economically-lucky ones on the coasts (for now) have no idea what is going on.

  5. rockman on Fri, 8th Dec 2017 1:10 pm 

    Antius – Certainly a possibility. Folks need to remember the US exports refinery products made from almost 5 million bopd. IOW on paper not one bbl of the OPEC imports are consumed in the US. In reality US refineries will buy from the cheapest source. And they won’t buy more oil then they expect to have buyers for their products.

    Lots of countries export refinery products. But none as much as the USA. Which also means no country imports as much oil to feed its product export machine as the USA. A complex dynamic for sure. But US oil imports do represent something of a barometer on the global economy.

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