Fewest oil cargoes to US in at least five years
07 January 2019 | Economics
When inventories began rising, that started to help decrease the demand for imports. - Gene McGillian, VP: Tradition Energy
Oil cargoes departing from OPEC nations to the United States fell to 1.63 million barrels per day (bpd) last month, down from 1.80 million bpd in November and 1.78 million bpd in October, the data show.
Saudi Arabia, the biggest producer in the Organisation of the Petroleum Exporting Countries, and several others curbed supplies in the face of rising US production and inventories, analysts said.
"Some of it was a decline in OPEC production," said Andy Lipow, president of Lipow Oil Associates in Houston. "But they're facing competition from US shale and Canadian production."
OPEC and allies including Russia agreed last month to cut crude production beginning this month by 1.2 million bpd, following a strategy to support prices when supplies overwhelm demand.
"Historically, Saudi Arabia has utilised crude export flows to the United States as a method of signaling the Kingdom's intentions, given the transparency of the US market," said Reid I'Anson, an energy economist at Kpler.
Vessels last month carried about 534 000 bpd from Saudi Arabia to the United States, down from 632 000 bpd in November. Algeria sent 10 000 bpd, down 94 000 bpd, and Nigeria shipped 103 000 bpd, down by 48 000 bpd, according to Kpler.
One major exception to the decline was Iraq, which sent 295 000 bpd to the United States, up by 140 000 bpd from November. Shipments from Venezuela increased 22 738 bpd.
Booming US shale production and growing stockpiles also crimped the nation's appetite for imported crude. US commercial crude stocks rose to 441 million barrels in the week ended Dec. 21, up from 394 million barrels in mid-September, according to the US Energy Information Administration.
"When inventories began rising, that started to help decrease the demand for imports," said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut. "We could see even lower imports from OPEC." – Nampa/Reuters