| NEW YORK
NEW YORK Feb 3 Global oil producers pumping out
crude have found particularly willing buyers lately in the
United States, where refiners have reaped short-term benefits
from buying foreign crude.
Some question whether refiners are being strategic in their
buying, piling up a surplus in advance of a potential border tax
on imported crude.
Analysts suspect it is due more to normal seasonal patterns.
Michael Wittner, global head of oil research for Societe
Generale, noted that the possibility of a border tax on imports
has prompted some traders to buy options on crude futures to
protect against higher prices in 2018. But he added that this
step is more difficult in the physical market, where refiners
face higher costs and logistical hurdles to store crude for the
U.S. imports of crude in January surged to 3.83 million
barrels a day, the highest four-week average since August as
record volumes were delivered from Canada, and the largest
shipments from Saudi Arabia since August arrived.
Shipments from the Organization of the Petroleum Exporting
Countries surged in December, as a last hurrah ahead of cuts
from the cartel that began in January.
"These guys sprinted into the end of the year and pushed out
as much crude as they possibly could," said Matt Smith, director
of commodity research at ClipperData. Some producers, like
Nigeria, raised output after previous supply disruptions,
boosting U.S. imports of the grades.
U.S. buyers also opted for more foreign crude in late 2016
prior to the OPEC cuts, as it was relatively more affordable.
Agreements to ship crude struck ahead of the output cuts may
have resulted in higher imports through December and January,
U.S. crude imports often ramp up from January to May, as
refiners gear up to satisfy seasonal gasoline demand.
The benefits from foreign crudes faded as OPEC's output cuts
have already shifted the market structure. Any U.S. border tax
that may be imposed would probably take a further toll.
Refiners have said they are reviewing the potential tax, and
are looking at keeping their crude slates able to run the most
economic grades of crude possible.
Without legislation on the table yet, they said it is
premature to speculate about such a policy.
"Right now there's a skeleton out there that they're trying
to put flesh on and we don't know exactly what is going to look
like," said Joe Gorder, chief executive officer of Valero Energy
Corp, the largest U.S. refiner.
(Reporting By Jessica Resnick-Ault; Additional reporting by
Jarrett Renshaw; Editing by David Gregorio)