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Author Topic: US Daily Crude Output Exceeds Imports For The First Time in 16 Years  (Read 883 times)

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Output was 32,000 barrels a day higher than imports in the seven days ended 31 May, says EIA - Bloomberg

US domestic crude-oil production exceeded imports last week for the first time in 16 years, a government report showed on Thursday.

“Output was 32,000 barrels a day higher than imports in the seven days ended 31 May,” according to weekly data from the Energy Information Administration, the Energy Department’s statistical arm. Production had been lower than international purchases since January 1997.

A combination of horizontal drilling and hydraulic fracturing, or fracking, has unlocked supplies trapped in shale formations in states including North Dakota, Oklahoma and Texas. The surge in oil and gas production helped the US meet 88% of its own energy needs in February, the highest monthly rate since April 1986, EIA data show. Crude inventories climbed to the highest level in 82 years in the week ended 24 May.

“It will help US energy independence and help our trade balance quite a bit,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. You have to wonder if you are going to see downward pressure on prices.

The US pumped 7.3 million barrels a day of oil last week, up 8,000 barrels from the prior week, the EIA said in its Weekly Petroleum Status Report. Imports fell 549,000 barrels a day last week to 7.27 million.

Stockpiles slid 1.6% to 391.3 million barrels last week as imports dropped and refineries used more crude to produce fuels. Supplies reached 397.6 million barrels in the week ended 24 May, the highest level since 1931.

Trend extension
“This is an extension of trends that have been well established over the last few years,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. The US market is much more comfortably supplied than a few years ago. We have a reduced need for imports.

Production climbed 42% over the past five years and reached a 21-year high of 7.37 million barrels a day in the week ended 3 May. Imports have tumbled 26% since May 2008.

Crude futures for July delivery gained 43 cents, or 0.5%, to settle at $93.74 a barrel on the New York Mercantile Exchange. Prices have slumped 35% since settling at an all-time high of $145.29 on 3 July 2008.

US petroleum imports fell to $29.6 billion in April, the lowest level since November 2010, the Commerce Department reported on Wednesday.

OPEC unease

The Organization of Petroleum Exporting Countries signalled growing unease with the US oil boom and started a study into shale at a ministerial meeting last week in Vienna at which it also left supply targets unchanged.

“The committee will consider the effect of shale oil on the global market for OPEC crude in the not-too-distant future,” Nigerian petroleum minister Diezani Alison-Madueke said on 31 May after the ministers met. It is a concern.

Increased US production has particularly affected imports from Africa, which typically produce lighter grades of oil similar to the North American blends. Imports to the US from Nigeria tumbled to a record low in February, based on EIA data going back to 1995. Shipments from Angola dropped to the lowest level since 1993 in March.

Saudi Arabian deliveries fell to a three-year low in January and Venezuelan imports slid to the lowest level in 10 years in February.

“It’s a bit worrisome for the outlook in the Middle East and countries like Venezuela which highly rely on energy exports,” Lynch said.

Source:   LiveMint


Adewale Odubiyi
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Nigeria Oil & Gas Forum


 

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