Recent U.S. imports of oil tend to be heavier than domestic production

[thackney]

Recent U.S. imports of oil tend to be heavier than domestic production
http://www.eia.gov/todayinenergy/detail.cfm?id=26132
MAY 6, 2016

In 2015, more than 70% of the crude oil produced in the Lower 48 states was light oil with an API gravity above 35 degrees. At the same time, 90% of imported crude oil was heavier, with a gravity below 35 degrees API. To accommodate increasing U.S. production of light crude oil, refineries have adjusted their imports by reducing imports of light crudes. The differences between domestic production and imports in this key oil characteristic could bring changes to petroleum refinery operations in the United States, as discussed in the EIA report, Implications of Increasing Light Tight Oil Production for U.S. Refining.

Domestic crude oil production has grown rapidly in recent years, primarily because of light crude oil produced from low permeability (tight) formations. EIA's report on crude oil production and crude oil quality estimates that about 90% of the nearly 3.0 million barrel per day (b/d) growth in production from 2011 to 2014 consisted of light crude oil, with an API gravity of 40 or above. At the same time, light crude oil imports fell from 1.7 million b/d in 2011 to 0.7 million b/d in 2014, and medium crude oil (27° ≤ API < 35°) imports decreased from 3.3 million b/d to 2.5 million b/d. Imports of heavy crude oil (<27° API) have remained near 4.0 million b/d since 2010.

U.S. refineries reflect a wide range of capacities, quality of crude oil inputs, utilization rates, and sources of crude oil supply. Most U.S. refineries are designed to run medium to heavy crude oil. However, technical options are available for shifts in input streams to process additional light crude oil.

For example, refineries optimized to run very heavy crude oil through cokers and other deep conversion units could reduce the use of those units and instead run light crude oil if that is a more profitable option. Depending on the prices of the different crude oils, the processing units that a refinery has, and the value of the resulting refined petroleum products, refineries will choose to process crude oils that optimize profit margins.

In 2015, the average API gravity for domestic refinery inputs was about 32 degrees, as refiners blended heavy and light crude oils to make a medium-grade feedstock. As discussed in EIA's report, Technical Options for Processing Additional Light Tight Oil Volumes Within the United States, U.S. refineries have accommodated much of the growth in U.S. crude production from 2010 to 2014 with two limited- or no-investment-cost options: displacing imports of crude oil (primarily light crude oil, but also medium crude oil) from countries other than Canada and increasing refinery utilization rates.

Links to supporting info at the source.

[IsailedawayfromFR]

Recent U.S. imports of oil tend to be heavier than domestic production
http://www.eia.gov/todayinenergy/detail.cfm?id=26132
MAY 6, 2016



Links to supporting info at the source.

I recall Texaco, my former employer in the 80s reconfigured its refineries to run heavy crude.  Idea was that, in the USA, the lighter crudes like WTI were gradually getting scarcer as these premium crudes were getting harder and harder to find and produce, and heavier, less attractive crudes were increasing.

Surprise, surprise, this trend got its legs cut out from under it when the unconventionals began producing several years ago.

Our refineries now simply cannot handle the lighter crudes unless some massive reconfiguration is undertaken.

Oh, and BTW, Texaco, which led the pack back then in doing this as a major refiner, went south and is no longer around 'cause it couldn't make up the downstream losses with its upstream business.

So much for guessing wrong.

[thackney]

So much for guessing wrong.

Given the price differential remains favoring the heavies, I'm not sure they guessed wrong.

Export more expensive, light sweet, import more cheaper, heavy.  Better the trade balance, more lower priced oil used in the US. 

[IsailedawayfromFR]

Given the price differential remains favoring the heavies, I'm not sure they guessed wrong.

Export more expensive, light sweet, import more cheaper, heavy.  Better the trade balance, more lower priced oil used in the US.

Ok, i'll give you guessing right for the wrong reasons, which is the same as being just plain lucky.

[thackney]

Ok, i'll give you guessing right for the wrong reasons, which is the same as being just plain lucky.

Very true.  And the differentials between heavy and light are down with the overall drop in price, so it isn't as good as it was.