[Graeme]

U.S. Taking on More Saudi Oil Despite Shale Glut

The U.S. Energy Department said imports from OPEC increased year-on-year, with Saudi Arabia accounting for the bulk of additional oil. While oil production from the United States has increased, the data show the global market is still interconnected.

The U.S. Energy Information Administration reported the amount of petroleum imported from members of the Organization of Petroleum Exporting Countries was 3.57 million barrels per day in December, the last full month for which data are available from EIA.

While only 0.5 percent higher year-on-year, the increase suggests the global energy market is still interconnected despite the success of shale. Imports from Venezuela, the No. 2 OPEC exporter to the United States, declined 22 percent from December 2012 to 846,000 bpd. Petroleum imports from Saudi Arabia in December, however, were 1.5 million bpd, a 47 percent increase year-on-year.

For non-OPEC members, the United States imported about 1 million bpd from Mexico in December, relatively static year-on-year. Imports from Canada, however, rose to 3.3 million bpd, a 5.4 percent increase from December 2012.



President Obama met last week in Riyadh with Saudi officials to reassure one of Washington's more reliable regional allies the bilateral relationship was still important in the era of U.S. oil dominance. Energy independence, however, is the prevailing trend in the U.S. oil market and East Coast refineries that normally rely on foreign crude are sourcing more Bakken oil with increased rail traffic. A strong link to OPEC markets, however, shows the United States won't break off completely. While the glut of North American crude oil will reshape the markets, it can't logistically redefine them.

huffingtonpost

[Plantagenet]

U.S. Taking on More Saudi Oil Despite Shale Glut

the glut of North American crude oil ...

huffingtonpost

Its bizarre to see news articles about the "glut" of North American crude, when the US is still importing millions of barrels of oil each day.

I wonder if this is part of the big push to begin export of US crude and the selloff of the SPR that George Soros and others have been making, all supposedly in the name of alleviating an completely imaginary "glut" in US crude production.

[Graeme]

How long can the US keep importing oil?

[Subjectivist]

How long can the US keep importing oil?

Until other people stop selling it or the price goes out of reach.

[ROCKMAN]

And now a touch of reality: “A strong link to OPEC markets, however, shows the United States won’t break off completely. And neither will the KSA as seen below. But remember what's really critical isn't how much oil the KSA (or Canada, for that matter) sends to the US but how much of the refined products are sold in this country:

The KSA owns a 50% interest in a huge amount of US refining capacity with the latest gain of 600,000 bbls/day with the Motiva refinery in Texas. The only surprise would be if the KSA had not been shipping OIL THEY OWN TO US REFINERIES THEY OWN, for Dog’s sake. Of course the Saudi gov’t “won’t break off completely” from exporting their oil to the US after they’ve invested $billions in refineries here. Just as they won't stop sending their oil to Chinese refinery JV's in which they've also invested $billions. They also own two other major refineries in La. Had it not been for severe operational screw-ups at Motiva the Saudis would have been exporting even more of their oil to the US sooner. BTW the Dutch own the other 50% of the refinery operation.

Also another interesting fact: Motiva can readily handle the Canadian oil sands production. And while the Canadians have promised they won’t export their oil production out of Texas there's no promise or restriction to exporting refined products made from their oil out of the US. And as we recall the southern leg of Keystone XL began delivering 600,000 bbls/day of that Alberta production last January to the same area as the Motiva refinery. And, coincidentally, guess what the nominal capacity of Motiva will be once they fix their engineering blunders: “On 31 May 2012 a turning of the valve ceremony took place at the Port Arthur refinery, celebrating the completion of a five year construction project that more than doubled the facility’s daily processing capacity to 600,000 barrels of crude.” And you can search till the cows come home and you won’t find how much Saudi oil is coming into the Motiva system. I’ve tried. But a good bet is that it will match the increased oil imports the KSA is sending to the US as a “show of their support” for our country.

Show of support my ass. LOL. As always just follow the money.

[westexas]

Combined net oil exports from the seven* major net oil exporters in the Western Hemisphere in 2004 fell from 5.9 mbpd in 2004 to 5.0 mbpd in 2012 (EIA, total petroleum liquids + other liquids).

Combined net oil exports from Canada + Mexico fell from 2.5 mbpd in 2004 to 2.2 mbpd in 2012.

*Canada, Mexico, Venezuela, Trinidad & Tobago, Argentina, Colombia, Ecuador

[Graeme]

WT, Thanks. We've talked about this before in other threads. I think we have a vague target of 2030 since KSA will be importing oil before that date according to Citigroup.

[Graeme]

Why Are U.S. Oil Imports Falling?

According to data from ­­­­­The Energy Information Administration (EIA) in their 2014 Early Release Overview, oil imports decreased from 12.55 million barrels per day in 2005, (60 percent of daily U.S. consumption), to 7.45 million barrels per day, (40 percent of daily U.S. consumption), in 2012. Preliminary data from the same report shows that imports dropped even further in 2013, to 32 percent of overall consumption.

So what accounts for the drop in imports? There are two likely reasons.

First, domestic supplies have increased due to a new drilling technique called hydraulic fracturing, also known as fracking, which involves the injection of more than a million gallons of water at high pressure into drilled wells thousands of feet below the surface. The pressure causes the rock layer to crack so that crude (unrefined) oil flows up the well.

Because hydraulic fracturing freed up oil that was previously inaccessible, U.S. production boomed, particularly in states like Texas, North Dakota, and Alaska.

According to more EIA data, total spending by oil (and natural gas) companies grew 11 percent on average per year from 2000-2012, and spending on development activities increased by 5 percent ($18 billion) in 2013. All this culminated in the U.S. production of 7.9 million barrels of crude oil per day in 2013, a level the country hasn’t hit since 1988.

U.S. production is expected to continue rising, to 8.4 million barrels per day in 2014, and 9.1 million barrels per day in 2015.

Second, imports decreased because high gasoline costs, fuel efficient cars, and the 2008 recession all led to lower national oil consumption, which decreased from 20.8 million barrels per day in 2005, to 18.64 million barrels per day in 2013. Although consumption hasn’t recovered to pre-2005 levels, it started to pick up in 2012, and the EIA predicts that consumption will continue to rise along with domestic production in 2014.

Despite increased domestic oil production and lower oil consumption, the US remains the largest importer of oil in the world, and spent $427 billion on imports in 2013.

time

[Graeme]

U.S. oil imports forecast to hit 45-year low next year

The U.S. Energy Department expects oil imports to hit their lowest level since 1970 next year, a forecast that is adding fuel to demands for the Obama administration to end a prohibition on crude exports that has been in place since 1973 Arab oil embargo.

The U.S. Energy Information Administration forecast that, by the end of next year, imported oil will account for only 22 per cent of U.S. consumption, or about four million barrels a day.

theglobeandmail

[Pops]

This is all a part of the conversation about what kind of glut we're facing and why the average price of gasoline is still historically high.

A dozen years ago the refineries were transitioning to handle heavier weight crude because the light oil was drying up and they knew it. They spent billions in the transition. But surprise! fracing came along and was especially effective on nat gas (these particular shales trap the most volatile and light weight stuff that usually migrates out) and caused nat gas price to fall. So drillers changed focus to "wet" gas (more condensate and NGPL) and oil so the big increase in the supply of condensate, light and ultra light oil.




This is really a big dot that is seldom discussed here so I'll repeat myself, we were drilling like crazy for gas but fracing made dry gas and then wet gas easy (more or less). Just a few hundred rigs can make all the gas we want for now (as long as they can find a place to drill) so targeting wet gas is more profitable if they can find a market. Essentially all rigs are now trying for either light oil or condensate from shale because the old conventional reservoirs are wearing out.

So the glut is gas condensate and ultra light oil. But the refiners still need heavy oil because that is what their equipment has been redesigned to process! They still need to recoup those billions spent on refinery modifications so they continue to import heavy oil and oilish stuff from Canada, Mexico, Venezuela, KSA.

That is the mismatch, and I'd guess that's why we'll continue to import about the the same amount of oil we do today. Imports of lightweight oil are already nearing zero but imports of heavy will be required until the refiners re-equip to process more ultra-light and condensate.

And that's why gasoline and diesel prices are still at record average highs.


http://euanmearns.com/usa-gas-independe ... t-markets/

[ROCKMAN]

"...shows the United States won't break off completely. While the glut of North American crude oil will reshape the markets, it can't logistically redefine them." The absolute absurdity of these spin efforts is truly amazing. First, as everyone here should already know there is no "glut of North American crude oil". Even the trick of using "North America" instead of the United States of America doesn't fly. Obviously since the USA is a huge net importer of oil there is now "glut" here. And Canada? There is no "glut" of oil there either: they produce and sell every bbl of oil they have. Being net oil exporter doesn't define "glut". Having more of a commodity to sell then the market place can absorb is a glut. Thus there is no North American glut...every oil company in NA is selling every bbl they can produce as fast as they can.

And the KSA is shipping more oil to the US today. Wonder if that has something to do with the KSA owning half of the 600,000 bopd Motiva refinery in Texas and two refineries in La with a combined capacity of 400,000 bopd. The KSA owns interest in US refineries that require 365 million bbls of oil feedstock per year. I wonder where they get that oil? BTW the Motiva corporation neither identifies who they get the oil from nor do they tell how much of the products are exported. BTW the US current exports about 3 million bbls of refined products every day.

And the "United States" does buy OPEC oil. Refineries in the US (both domestically and foreign owned) buy OPEC oil. And they buy it for one reason profit margin. US refineries don't care about the well being of the KSA more than they care about US oil producers. Except, of course, they probably care a little about a foreign oil producer that happens to own them. LOL.

[kublikhan]

And you can search till the cows come home and you won’t find how much Saudi oil is coming into the Motiva system. I’ve tried.
...
And the KSA is shipping more oil to the US today. Wonder if that has something to do with the KSA owning half of the 600,000 bopd Motiva refinery in Texas and two refineries in La with a combined capacity of 400,000 bopd. The KSA owns interest in US refineries that require 365 million bbls of oil feedstock per year. I wonder where they get that oil? BTW the Motiva corporation neither identifies who they get the oil from nor do they tell how much of the products are exported.

I think you can find this out from data the EIA publishes, if you are willing to do a bit of digging and math. Reuters did this back in 2012. During April 2013, about 60% of Motiva's total crude came from Saudi Arabia.

BREAKING IT DOWN
In total, Motiva imported 315,000 bpd of Saudi crude in the first quarter[of 2012], a 112,000 bpd increase from the year before, the calculations show. Of that, about 250,000 bpd went to Port Arthur, the plant's largest intake since early 2007 and enough to meet nearly all the refinery's pre-expansion demand.

The balance of Motiva's crude imports from Saudi Arabia in the quarter went to its Convent plant in Baton Rouge, Louisiana, which had bought almost no Saudi crude a year ago.

The data also shows that Saudi Arabia found other customers ready to increase purchases to a degree not previously known. Valero's imports in the quarter jumped nearly 130,000 bpd to a total 217,000 bpd, the data show. That's a more than 50 percent rise over its average for all of last year, and pushed its intake of Saudi crude to the highest since 2008.

Texas refinery crisis rattles Saudi oil export drive

Separate data from the EIA showed that Saudi crude oil shipments bound specifically for Motiva's Port Arthur refinery surged in April to nearly 375,000 bpd, up from a first-quarter average of 206,000 bpd as the company began to heat up the crude unit for operation.

The extra crude bound for that plant accounted for almost the entire rise in Saudi imports in April, which reached nearly 1.6 million bpd, the highest monthly total since July 2008. First-quarter imports averaged around 1.4 million bpd.

After Motiva glitch, no let-up yet in Saudi-US oil sales

Imports from Saudi Arabia rose to 975,000 b/d from 798,000 b/d.

Motiva Enterprises' 600,000 b/d Port Arthur, Texas, refinery imported 16.6 million barrels in May [2013], fed largely by term supplier Saudi Arabia.

US crude imports edge slightly higher in May: EIA

Also of interest in this data is the extent to which refineries owned by overseas producers are importing their national crudes. It appears these refiners do run a lot of their national crude.The Motiva refinery that is joint owned by Shell and Saudi national oil company Aramco imported 60 percent of its crude from Saudi Arabia.

Houston Refinery Crude Imports and Supply Balance

2013 Crude Oil Imports From Persian Gulf Highlights
January - December 2013 (thousand barrels)
Company Total Persian Gulf % Persian Gulf
MOTIVA ENTERPRISES LLC 166,970 135,010 81%
Persian Gulf includes = Bahrain, Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and United Arab Emirates.

Crude Oil Imports From Persian Gulf

[ROCKMAN]

K - Very good. I tried finding the data directly from Motive. I wonder what data those folks access? Did they say they were given the data from Motive or were they making educated guesses?

[kublikhan]

This data is included in the EIA's report "Company Level Imports". There is a summary of recent data here. But you probably want to click on the XLS link to see the details. Then scroll down to "Motiva Enterprises LLC". Their is a column that breaks down each company's imports by country of origin. For example:

1 RPT_PERIOD R_S_NAME LINE_NUM PROD_CODE PROD_NAME PORT_CODE PORT_CITY PORT_STATE PORT_PADD GCTRY_CODE CNTRY_NAME QUANTITY
1138 Apr-14 MOTIVA ENTERPRISES LLC 9 025 Crude Oil 2101 PORT ARTHUR, TX TEXAS 3 785 SAUDI ARABIA 2556
1139 Apr-14 MOTIVA ENTERPRISES LLC 8 025 Crude Oil 2101 PORT ARTHUR, TX TEXAS 3 785 SAUDI ARABIA 3580
1140 Apr-14 MOTIVA ENTERPRISES LLC 7 025 Crude Oil 2101 PORT ARTHUR, TX TEXAS 3 785 SAUDI ARABIA 3583

You should also check out the Company Level Imports Explanatory Notes for a description of what each column represents. There are
Instructions here for filling out form EIA-814 if you wanted some more hints on how to interpret the data.

[JV153]

Well, how much oil is used just to frack for LTO in the US ? Just 10,000 heavy trucks operating 24/7 uses a gigabarrel of oil in 25 years.