Oil exports to U.S. set record
Oilsands output helps fill shortfall from Venezuela, Mexico
By Lisa Schmidt, Calgary Herald
September 30, 2009
Canada --already the largest oil supplier to the U.S.--pumped out record exports south of the border this summer, as Alberta's oilsands crude fill the gaps left by competitors.
U.S. imports of crude oil from Canada rose 5.4 per cent in July to the highest monthly level in at least 36 years, according to figures released by the U.S. Energy Department.
Canada's crude oil imports averaged 2.11 million barrels a day, the most since the Department of Energy began breaking down import records by country in January 1973.
Canada is the largest exporter of crude oil to the U.S. and has increased the amount it ships as OPEC countries have cut back.
Even as the economic downturn slows demand for fuel, Canadian oil exports are finding more room in the U.S. refining market.
"It's actually filling a void that's been left by Venezuelan oil that's been going to other markets and Mexican oil that's going into decline," said Greg Stringham, vice-president of the Canadian Association of Petroleum Producers.
"I think that will be an indication for the future."
Imports from Canada in July rose 109,000 barrels a day from June, and 134,000 barrels a day, or 6.8 per cent, from July 2008.
More than 62 per cent of the total was shipped via pipeline into the Midwest. The imports ranged from heavy, sour crude to light, sweet synthetic oil upgraded from Alberta's oilsands.
Those imports are expected to rise as a number of pipeline projects come to fruition, amid rising concerns from U.S. environmental groups about the higher carbon emissions from oilsands crude.
The U.S. State Department last month last month gave the go-ahead for Enbridge's Alberta Clipper pipeline, which will start feeding 450,000 barrels of oilsands bitumen daily into the American heartland next year. TransCanada's Keystone pipeline, which also will ship oilsands crude to the U.S. Midwest, is currently under construction with completion slated for later this year.
Canadian crude imports "have been growing steadily," said Antoine Halff, head of energy research at Newedge USA LLC in New York. "It reflects a market reality that in the U.S. some imported supplies are being displaced by Canadian production."
The U.S. imported fewer cargoes from Mexico and Venezuela in July, according to the Department of Energy. Venezuelan imports fell 27 per cent from a year earlier to 865,000 barrels a day, and Mexico sent 985,000 barrels a day to the U.S., down from 1.2 million in July 2008.
Saudi Arabia, the fourth-largest exporter of crude oil to the U.S., shipped 1.14 million barrels a day in July, according to the department, after hitting a 20-year low of 902,000 barrels in June. Saudi exports were down 539,000 barrels a day, or 32 per cent, from a year ago.
"Some imported supplies are being displaced by Canadian production, but on the flipside for the Saudis, the Asian market is a growth market," said Halff. "It makes more sense to redirect some to China, where the profit margins are higher," he said.
Poor demand has also cut the profit margin for crude from Saudi Arabia versus onshore Canadian supplies, he said.
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