U.S. importing more oil for the first time since 2010

WASHINGTON, Oct. 21 (UPI) — The U.S. Energy Department said it expected more crude oil will enter the country from foreign countries in part because U.S. oil was less cost effective.

During the first half of the year, the U.S. Energy Information Administration, part of the Energy Department, said total crude oil imports increased 7 percent year-on-year. The increase marks a first since 2010, when imports started to decline in response to rising domestic output.

By region, EIA said imports from members of the Organization of Petroleum Exporting Countries increased by 504,000 barrels per day, making up the bulk of the new oil entering the U.S. economy. Declines from Mexico were offset by more imports from Canada, making the net gain from non-OPEC countries less than 24,000 bpd.

ALSO READ   Nigeria: 24-hour curfew imposed in Plateau LG as protest leaves three dead

The EIA said the difference in price between U.S. crude oils, like the benchmark West Texas Intermediate, and global standards like Brent contributed in large part to the increase in imports.

“The narrowing price differences between U.S. crudes and international benchmarks provided an incentive for increased imports by refiners in areas where imported crudes now had a delivered cost advantage relative to similar domestic crudes,” EIA explained.

ALSO READ   Turkish prime minister announces decision to step down

Lower crude oil prices, which dropped below $30 per barrel this year, also limited U.S. crude oil production as energy companies scaled back in the expensive inland shale basins. Total U.S. crude oil production declined by about 500,000 barrels per day on average between the first half of last year and the first half of this year.

The United States briefly passed Saudi Arabia as the top net oil producer in 2014. Under pressure from lower crude oil prices and weaker demand, U.S. crude oil production is expected to decline through the end of the decade.

ALSO READ   Chronic use of antacid drugs may speed up aging of blood vessels

U.S. lawmakers last year pressed the federal government to end a ban on U.S. crude oil exports. Sen. John Hoeven, R-N.D., said U.S. oil overseas could contain adversaries like Russia while bringing stimulus to U.S. consumers in the form of lower retail gasoline prices.

Republican presidential nominee Donald Trump said at a conference this year in North Dakota that he’d end U.S. oil imports from OPEC if elected in November.

In its daily briefing Friday, EIA said it expected annual crude oil imports to increase on a net basis both this year and in 2017.