| NEW YORK
NEW YORK Jan 12 U.S. East Coast refiners are in
the midst of their biggest buying spree of Algerian crude in
years as they take advantage of cheap oil spilling out of the
region, traders said on Thursday.
The renewed interest in Algerian crude comes as the country
ramped up exports and fellow African OPEC producers Libya and
Nigeria have seized on their exemption from global production
cuts and turned on their oil spigots, flooding a well-supplied
market in need of new customers.
"It's real competitive, and I don't think it's going to stop
any time soon," said a U.S. East Coast oil trader, of the rise
in Algerian imports.
The surge also comes as U.S. East Coast refiners have
all-but abandoned domestic crude via rail out of North Dakota in
favor of waterborne imports following the collapse of the wide
discount CL-LCO1=R U.S. crude enjoyed against the global
benchmark Brent, during the outset of the shale revolution in
2011 until the back half of 2015.
In October, U.S. East Coast refiners imported 156,000
barrels per day of Algerian crude, the second-highest monthly
tally ever and the most since 2007, the latest U.S. Energy
Information Administration figures show. November and December
were also active months, after nearly two years of limited
Algeria's crude oil exports hit record highs in October, a
source from state-run oil company Sonatrach told Reuters.
The biggest buyers of the October Algerian cargoes were
Philadelphia Energy Solutions and Monroe Energy, followed by
Phillips 66, EIA data shows. All three are historically
big buyers of Bakken crude, which is comparable to North and
West African grades.
The buying continued in November and December, with 7,825
bpd and 109,765 bpd, respectively, imported into the East Coast,
Reuters shipping data showed.
In the 21 months before October, there were only six months
with Algerian imports into the U.S. East Coast; none higher than
41,000 bpd, EIA data shows.
October offers the clearest picture of how oil flows have
shifted along the U.S. East Coast - total foreign imports into
the region reached 1.07 million bpd, the highest in 59 months,
while domestic crude volumes by rail fell to 129,500 bpd, the
second-lowest total in 46 months.
Sarah Emerson, managing principal at consultancy ESAI Energy
LLC, said she expects African grades to continue to hit the East
Coast, particularly as Libya and Nigeria boost production.
"The one thing that helped boost rail into the East Coast
was Libya production disappeared. That's not the case any more,
and I wouldn't be surprised if we start seeing Libyan barrels on
the East Coast," Emerson said.
(Reporting By Jarrett Renshaw; Editing by Marguerita Choy)