US oil production fell for a fifth straight month in January, while the price of crude oil was lower than last month.
The drop in oil prices has led to a sharp fall in exports, with the US importing only 25% of its total oil consumption in January.
It is the first time in eight years that US oil imports have declined to below 40% of total demand, according to the Energy Information Administration.
The US imports oil from around the world.
However, oil demand from China is expected to increase in the future, as China is the world’s largest oil consumer.
“We have a massive surplus of oil in the world,” Brent crude oil producer ExxonMobil Chief Economist and Research Fellow Andrew Farnsworth told Bloomberg.
“There is no question about that.”
US crude oil production was down 8.4% year-on-year to 3.75 million barrels a day (bpd), according to Bloomberg.
Brent crude was the lowest since August 2015.
US crude oil output dropped to 3,903,000 bpd in January from 3,960,000 last year.
Brent oil is the most traded oil on the global market and was up 14.2% in January to $41.77 per barrel.
China’s crude oil imports were also down, by 10.4%.
China imported about a third of its oil in January and is forecast to increase to about 40% by 2030, according the Energy Department.
In December, the US exported about 4.1 million bpd of crude and refined products, according data from the US Energy Information Authority.
In January, the United States imported about 4 million bps, down 3.3% from December.
“I think it is clear that we are moving away from producing crude and producing gasoline,” James Buesseler, chief economist for commodities at Capital Economics, told CNBC.
“It is not just about oil, but gasoline, which we export to China, too.”
The decline in US oil consumption is likely to affect the economy.
US GDP grew 0.6% in the fourth quarter of 2018, compared with 0.7% in Q3 2018.
The US economy grew 3.4%, or 1.4 million, in the third quarter of 2019.
However, according Buessellers, the oil industry is likely responsible for the recent slump in US manufacturing output.
The industry is experiencing a drop in demand and increased inventory that has pushed down the price paid for new goods.
According to the US Bureau of Labor Statistics, the manufacturing sector shed about 1 million jobs in January 2018.