On Wednesday, the U.S. Energy Information Administration, or EIA, will publish its weekly Petroleum Status Report. And this week, it’s expected to show a decrease in oil imports into the U.S. Gulf region.
Matt Smith, director of commodity research at ClipperData, says while some may assume that’s because the U.S. is simply producing too much oil to need any imports, the actual reason isn’t that simple. The U.S. is a top exporter of shale oil, but that isn’t necessarily a direct cause of the drop in imports.
“U.S. Gulf refiners still need to import heavier crude, and that’s something that U.S. shale cannot be a replacement for, so that isn’t exactly what is at play at the moment here,” Smith says.
Imports dropped for a variety of reasons, Smith says. For one, OPEC member countries cut oil production. Then there’s the crisis in Venezuela, which has meant the country is exporting less oil to the U.S. Also, there’s been foggy weather in the Gulf, and it’s also the time of year when refineries perform maintenance on their equipment so they’re less able to process imported oil.
What you’ll hear in this segment:
– What weekly EIA reports can tell us about the state of the U.S. energy industry
– Why U.S. refineries are suited for refining imported crude
– Why the U.S. is exporting so much gasoline and so-called middle distillates
Written by Caroline Covington.