Imports of crude oil to the U.S. Gulf Coast dived to their lowest level in almost three decades last week, due to OPEC's production cuts, unusually low Iraqi shipments, and congestion on the Houston Ship Channel from a tank farm fire last month.
According to weekly preliminary U.S. government data, cited by Bloomberg, the Gulf Coast's crude imports were just 1.4 million bpd last week, with imports from Iraq at only 5,000 bpd. The shipments from Iraq were at their lowest since August 2015, when the U.S. didn't import any Iraqi crude oil.
The low volumes from Iraq, plus the Saudi tactic to focus on cutting exports to the U.S. in a bid to draw down the most transparently reported oil inventories in the world, resulted in U.S. imports from its top six suppliers from OPEC dropping to below 1 million bpd last week. This was the first time such imports have dropped to below the 1-million-bpd mark in data going back to 2010, according to Bloomberg.
Apart from the reduced imports from Saudi Arabia and Iraq, the fire at the Intercontinental Terminals Company's (ITC) petrochemical storage site at Deer Park, Texas, in the middle of March blazed for days and halted some ship traffic at the Houston port, and continued to disrupt tanker traffic into the U.S. Gulf Coast for weeks.
Earlier this month, the U.S. Coast Guard restricted outbound traffic at the Houston Ship Channel, due to storms that had suspended cleaning-up after the fire and the chemical spill.
On Wednesday, the EIA reported a 1.4-million-barrel crude draw in the week to April 12, accompanied by a draw in gasoline stockpiles.
"The key driver behind the draw was the fall in weekly crude oil imports," Warren Patterson, Head of Commodities Strategy at ING, said on Thursday, noting that the total U.S. drop of 607,000 bpd week-on-week to average 5.99 million bpd was driven by the Gulf Coast, and "likely reflects the disruptions in shipping we have seen in Houston in recent weeks."
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More