* First spot North Sea cargoes sent to U.S. since Januarybooked this week
* West African imports to U.S. up around 50 percent sinceJanuary - traders, analysts
* Increase unlikely to be sustained, but more volatility inArb
By Simon Falush and Selam Gebrekidan
LONDON/NEW YORK, March 14 (Reuters) - U.S. imports of WestAfrican and European crude are recovering once again aftershifting arbitrage economics made these shipments cheaper thanrailed Bakken oil from North Dakota.
This week, BP booked a cargo of Norwegian crude oil to beshipped to Philadelphia later in March, while another vessel ofNorth Sea crude oil was booked by Total to go to the Caribbean.
This was the first time since January that any spot NorthSea cargoes have been booked to move to the United States otherthan for term deals, traders said.
Traders have reported a pick up in West African crude oilcargoes to the United States which the U.S. Energy InformationAdministration (EIA) data showed had ground almost to a haltlast year.
Preliminary import data from the U.S. EIA show threesuezmax-sized cargoes arrived from Nigeria in late February andearly March and another from Angola in late February.
While sporadic shipments have arrived from both countriesover the last few months, a steady if small stream hasestablished itself since February.
Four-week average imports from Nigeria alone stood at110,000 barrels-per-day last week, the highest level this year,according to EIA data.
Market sources and analysts say there is around 50 percentmore oil per month travelling across the Atlantic in lateFebruary and March compared to January and late last year.
For years, a surge in U.S. domestic oil production and thecheap cost of shipping Bakken crude oil to the East Coast viarail cars had dried up imports from across the Atlantic.
Indeed, Nigerian imports to the United States stood at93,000 bpd in November, the lowest level since February 1983.They recovered only slightly in December to 99,000 bpd.
They reached a peak of 1.4 million bpd in 1979 and wereabove 1 million bpd for much of the 2000s.
This slump had been encouraged by a growing premium ofEuropean crudes to oil originating in North America.
However, Brent crude's premium to U.S. crude dipped to its lowest since October earlier in March to below$5.50, though it has since recovered.
European and West African grades of crude oil arebenchmarked against Brent.
TRANSPORT COSTS
Louisiana Light Sweet and Bakken crude havebecome less competitive against Brent crude due to increasedtransportation costs.
Differentials for Bakken shale oil for delivery atClearbrook, Minnesota, were much stronger for most of this yearafter it became clear weather was going to severely affectproduction.
"Bakken might not have been very attractive to U.S. AtlanticCoast refiners due to price considerations," said David Wech,analyst at JBC Energy in Vienna.
"But (this is) possibly also based on reduced availabilityfollowing disappointing production levels due to harsh winterweather and logistical hiccups in line with rail safety issues."West African crude would be the natural replacement."
December output from the Bakken and Three Forks shales inNorth Dakota fell by nearly 50,000 bpd from a record high over 910,000 bpd in November, as a series of snow storms and windchills cut into production.
Output was nearly unchanged at just over 870,000 bpd inJanuary, according to the latest reports from North Dakotaregulators. [ID: nL2N0MA1SY]
Differentials went from as low as $15.50 under U.S. crudefutures in early November to $2.50 under in early January asoutput fell, although this strength has eased for barrels due tobe sent in April.
On Thursday, North Dakota Sweet (Bakken) oil for Aprildelivery at Clearbrook traded at $6.00 a barrel under thefront-month U.S. oil futures contract.
Meanwhile, it costs somewhere between $14 and $17 a barrelto get that oil from the northern Midwest state to refinersalong the U.S. East coast, according to a recent reportpublished by Valero Energy. That compares withpreviously published estimates from Tesoro Corp thatpegged the cost at $9 to $10 a barrel.
In fact, refiners may soon see these costs rise after aseries of accidents involving light sweet Bakken oil broughtintense regulatory scrutiny to the practice of shipping oil byrail.
Many analysts expect new safety measures to add to the costof transporting Bakken to the East Coast aboard freight trains.
Market participants think it very unlikely that there willbe a sustained shift to a significant arbitrage for cargoes tohead west across the Atlantic, but there will likely be morevolatility in flows, as transport economics shift said OlivierJakob at Petromatrix in Zug, Switzerland.
"There have been big changes in transport capacity, andthere will be more swings as transport economics change," hesaid.
One factor which could close the arbitrage window would be asustained release of the Strategic Petroleum Reserve, whichwould put pressure on the price of U.S. crude relative to Brent.
Indications that this may happen came from the fact that the United States launched its first test sale of crude from itsemergency oil stockpile since 1990.
"A brief recovery in exports to the U.S. could be haltedafter a U.S. reserve release," a trader of West African crudesaid.
BP (BP.)
