Monday, April 09, 2012
Approximately 1,900 Mb/d of waterborne crude oil imports to the U.S. Gulf Coast will be forced to find another market due to burgeoning U.S. supply and flat refining demand.
EVERGREEN, CO (April 9, 2012) – BENTEK Energy, a leading energy markets information and analytics company, reports that overseas crude oil imports to the U.S. Gulf Coast region (PADD 3) are expected to decline 40% over the next five years to an average of 4,914 Mb/d in 2016. The PADD 3 section of BENTEK’s Market Alert, Crude Awakening: Shale Boom Hits Oil reveals that overseas imports of both light and heavy crude will be impacted in the Gulf Coast region. The majority of the displacement will be light crude due to an influx of light supply from unconventional oil plays in the U.S. However, as infrastructure expands across the U.S-Canadian border over the next few years, growing volumes of heavy crude from the Canadian oil sands will make its way to the Gulf Coast for refining and will force out waterborne heavy crude imports. The U.S. imports the largest volumes of crude into the Gulf Coast from Mexico, Saudi Arabia, Venezuela and Nigeria.
BENTEK’s Market Alert reports that regional refining demand growth will not keep pace with projected supply increases in the U.S. and Canada. Refineries will have to dramatically reduce waterborne crude imports to prevent severe oversupply conditions and capitalize on less expensive North American crude in the Gulf Coast region.
“Gulf Coast refineries are among the most complex in the world and have the ability to handle just about any type of crude, whether light or heavy, making them a prime target for U.S., Canadian and international oil producers,” noted BENTEK Manager, Oil Analysis, Matt Marshall. “Understanding how much U.S. and Canadian crude will be delivered to the Gulf Coast through new rail and pipeline projects, and when those projects come online, is vital to anticipating price swings and the amount of overseas imports that will be displaced. However, U.S. and Canadian crude oil producers will face a stark reality over the next few years – the Gulf Coast is a finite demand market. When one source of supply grows significantly, another has to decline.”
The Gulf Coast region is not only home to the largest and fastest growing crude oil production areas in the country, including the Eagle Ford, Permian and Anadarko, but also contains the largest concentration of refining infrastructure. In response to booming oil supply growth across the U.S. and western Canada, five refinery projects are currently planned in PADD 3 that will boost the region’s refining capacity to more than 9,000 Mb/d or about half of total U.S. refining capacity. As an increasing amount of U.S. and Canadian crude is transported to the Gulf Coast for refining, BENTEK’s Market Alert projects that regional oil prices will decline relative to international benchmarks.
BENTEK’s Market Alert, Crude Awakening: Shale Boom Hits Oil, provides a comprehensive review of the U.S. and Canadian oil market and its potential growth over the next five years, including industry challenges and implications. The PADD 3 section of the Market Alert offers in-depth analysis of historical and projected crude oil production growth through 2016, including trends in the Permian Basin, Eagle Ford, Offshore Gulf, Anadarko and other basins and plays. This section also reviews planned regional transportation and refinery expansions and includes detailed analysis of how regional crude oil supply and demand changes will impact prices and overseas oil imports.
For more information about BENTEK’s Crude Awakening: Shale Boom Hits Oil Market Alert or BENTEK’s full line of Crude Oil Production Monitors, go to www.bentekenergy.com or call 1-888-251-1264.