US crude oil imports
On February 18, 2016, the EIA (U.S. Energy Information Administration) reported that US crude oil imports rose by 0.8 MMbpd (million barrels per day) to 7.9 MMbpd for the week ending February 12, 2016. In contrast, US crude oil imports fell by 1.1 MMbpd to 7.1 MMbpd for the week ending February 5, 2016.
The rise in US crude oil imports led to a massive surge in US crude oil inventory, as was discussed in Part Two of this series.
US crude oil imports in 2015
Current US crude oil imports are 11% higher than last year’s level of 7.1 MMbpd. US crude oil imports may have risen due to decade-low crude oil prices. Also, Middle Eastern oil producers have entered into long-term contracts with large independent oil refiners such as Valero Energy (VLO) and Phillips 66 (PSX). The wide spread between Brent and WTI may also be supporting US refiners such as Western Refining (WNR), Alon USA Partners (ALDW), Tesoro (TSO), and Northern Tier Energy (NTI).
However, historic low crude oil prices negatively affect US upstream companies such as Chesapeake Energy (CHK), Range Resources (RRC), and Pioneer Natural Resources (PXD). ETFs and ETNs such as the ProShares UltraShort Bloomberg Crude Oil ETF (SCO), the Vanguard Energy ETF (VDE), and the VelocityShares 3x Long Crude Oil ETN (UWTI) are also affected by volatility in the oil market.
In the next part of this series, we’ll look at US crude oil refinery demand.