Market Currents: U.S. oil imports showing strength
Friday September 16, 2016
1) In response to last week’s hugely huge oil draw from from weekly inventories, we have put togetherthis free white paper explaining what happened, and how our ClipperData is able to predict such anomalies. Check it out!
2) Counter to expectations, crude output in the U.K. North Sea has not dropped off this year. In fact, projections from Wood MacKenzie show it should continue to rise going forward; they expect it top 1 million barrels per day in 2016, and to continue to rise through 2018 before dropping again.
This is somewhat counter to EIA’s assessment; it sees North Sea production rising ~100,000 bpd this year, before declining by 210,000 bpdnext year. This year’s increase is due to recent projects coming online, which were invested in way back when oil prices were considerably higher.
3) This time last week was a long time ago we discussed rising crude imports into the U.S. from OPEC. At this juncture – prompted by the above – we can see that flows from Northwest Europe have also increased. We highlighted yesterday how ClipperData’s Abudi Zein had penned a piece on RBN Energy about how net imports into the U.S. are strong; the rise in Northwest European flows is one more indication of this.
As our ClipperData illustrate below, imports of Northwest European grades are up nearly 80 percent through August compared to year-ago levels. The majority (~80 percent) are light sweet crude (led by Ekofisk, Troll), with the remainder heavy sour, with nearly two-thirds of the volume heading to to East Coast refiners, and the rest to the U.S, Gulf.