The U.S. Energy Department said imports from OPEC increased year-on-year, with Saudi Arabia accounting for the bulk of additional oil. While oil production from the United States has increased, the data show the global market is still interconnected.
The U.S. Energy Information Administration reported the amount of petroleum imported from members of the Organization of Petroleum Exporting Countries was 3.57 million barrels per day in December, the last full month for which data are available from EIA.
While only 0.5 percent higher year-on-year, the increase suggests the global energy market is still interconnected despite the success of shale. Imports from Venezuela, the No. 2 OPEC exporter to the United States, declined 22 percent from December 2012 to 846,000 bpd. Petroleum imports from Saudi Arabia in December, however, were 1.5 million bpd, a 47 percent increase year-on-year.
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For non-OPEC members, the United States imported about 1 million bpd from Mexico in December, relatively static year-on-year. Imports from Canada, however, rose to 3.3 million bpd, a 5.4 percent increase from December 2012.
U.S. Sen. John Hoeven, R-N.D., said last week energy security concerns in Eastern Europe should serve as a reminder of the need to encourage more production at home. Russia's control over natural gas transit networks in Ukraine illustrates the importance of development oil and gas resources in North American for the sake of energy security. More production, he said, "is central to economic and national security."
North Dakota, the No. 2 oil state in the country, produced 933,128 bpd in January and most of that came from the lucrative Bakken shale formation. North Dakota oil production is expected to top the 1 million bpd this year. State data show an all-time record of 976,453 bpd in November.
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The U.S. Energy Information Administration said in its short-term market report a rough winter has curbed domestic oil production. A colder-than-normal winter in the United States meant higher withdrawals of energy products used for heating. What EIA described as "harsh winter conditions," meanwhile, meant well completion in northern states like North Dakota was down. This in turn caused the administration to revise downward the estimates of U.S. crude oil production.
President Obama met last week in Riyadh with Saudi officials to reassure one of Washington's more reliable regional allies the bilateral relationship was still important in the era of U.S. oil dominance. Energy independence, however, is the prevailing trend in the U.S. oil market and East Coast refineries that normally rely on foreign crude are sourcing more Bakken oil with increased rail traffic. A strong link to OPEC markets, however, shows the United States won't break off completely. While the glut of North American crude oil will reshape the markets, it can't logistically redefine them.
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By Daniel J. Graeber of Oilprice.com
