US petroleum imports have fallen from a peak of almost 14 million barrels per day (bpd) to around 9 million bpd.
US crude oil prices have moved into a premium over internationally traded Brent following an unexpected drop in American inventories and potential exports, but global markets still suffer from ballooning oversupply.
Front-month U.S. West Texas Intermediate (WTI) crude futures were trading at $36.33 per barrel at 0220 GMT, up 19 cents from their last settlement.
With Brent at $36.29 per barrel, this flipped WTI from a long-standing discount into a slight premium over the international benchmark for the first time since a brief period in November 2014 and, before that, since 2010.
Prior to then, WTI was usually at a premium to Brent as the U.S. shale oil boom had yet to kick off, meaning that the world’s biggest oil consumer had higher fuel imports.
U.S. petroleum imports have fallen from a peak of almost 14 million barrels per day (bpd) to around 9 million bpd.
But as shale output dips and the government lifts a decades-old crude export ban, the U.S. market could tighten while supplies globally keep ballooning on the back of soaring output from Russia and the Organization of the Petroleum Exporting Countries (OPEC).
The U.S. congress this month voted to lift the ban to export domestic crude supplies, and although no immediate large-scale exports are expected, some American oil will flow from the United States into the global market next year.
Stronger WTI prices were also supported by an unexpected fall in U.S. crude stocks, as reported by industry group the American Petroleum Institute.
Crude inventories fell by 3.6 million barrels in the week to 486.7 million, compared with analysts’ expectations for a increase of 1.1 million barrels.
The general outlook for oil markets remains for low prices as production is seen to remain near record levels until operators are forced to shut down due to financial loss.
“We see risks to our OPEC production forecast of 32 million bpd next year as skewed to the upside (and) storage continues to fill with the potential for hitting storage constraints by the spring rising,” Goldman Sachs said this week, adding that U.S. drilling activity also remained too high for a significant production cut.
Crude prices may need to fall to $20 per barrel to force shutdowns and bring production back in line with demand, the bank said.
Global production currently exceeds demand by 0.5 and 2 million barrels per day, based on analyst estimates.