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US gets fewest oil cargoes from Opec in 5 yrs as production decline begins

Saudi Arabia, the biggest producer in the Opec Countries, and several others curbed supplies in the face of rising US production and inventories

Reuters  |  Houston 

Representative Image
Representative Image

OPEC crude cargoes leaving for the United States in December dropped to the lowest level in at least five years, data from Refinitiv Eikon and market intelligence firm Kpler show.

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 Organization 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 Associates in Houston. "But they're facing competition from US shale and Canadian production."

OPEC and allies including 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.

OPEC pumped 32.68 million bpd last month, according to a Reuters survey, down 460,000 bpd from November, suggesting some members moved to reduce supplies ahead of the recent accord.

"Historically, Saudi Arabia has utilized crude export flows to the United States as a method of signalling the Kingdom's intentions, given the transparency of the U.S. 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 U.S. shale production and growing stockpiles also crimped the nation's appetite for imported crude. U.S. 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 U.S. 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."

 

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Fri, January 04 2019. 00:29 IST
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