US Energy Information Administration recently reported that domestic crude oil production in the United States is expected to exceed imports by the end of this year.
Meanwhile, net petroleum imports in the US have been already less than domestic production since early February. The latest figures in the EIA weekly statistics showed net petroleum imports fell below 6 million barrels per day compared to 7.15 million bpd of crude oil production.
Since petroleum demand in the US is the lowest level in the past 20 years, the country's dependence on imported petroleum is getting smaller.
Net petroleum imports by China are quite close to the US, Chinese buying seems to be bigger than the US in the near future.
The reason of decreasing US petroleum imports is of course higher crude oil outputs in the north America triggered by the Shale Revolution.
Increasing supply from Canada and North Dakota pushes up crude oil inventories in the US Midwest region. Current inventory level in the area is close to the working storage capacity limit of 120 million barrels.
Crude oil stocks level at Cushing of Oklahoma reached to above 51 million barrels in early this year. The critical inventory level at the physical delivery point of NYMEX crude oil futures was close to the maximum capacity of 64 million barrel, and led Brent premium against WTI to over $20 per barrel.
However, crude oil inventory in the US Midwest has been close to the maximum level. Therefore, absence of further increase of Midwest inventory level is likely to limit Brent premium against WTI in the future.
On the other hand, current working crude oil storage level at the Gulf of Mexico region is about 270 million barrels. The latest inventory level of 180 million barrels is 67% utilization. It is much higher level compared to 53% as of the end of September 2012.
Crude oil supply from Canada and domestic inland oil fields that are not able to store in the Midwest region are being sent to the Gulf of Mexico area through the Seaway Pipeline. As long as domestic petroleum demand does not recover significantly, the US is likely to reduce crude oil imports into the Gulf of Mexico region further in order to avoid the inventory to reach the critical level.