U.S. Oil Exports Hit A Record High
Crude oil exports from the United States hit another record last week, at 2.133 million bpd, as production also continued growing, the Energy Information Administration said. This is the first time U.S. oil exports have breached the 2-million-bpd level. The authority said average daily production stood at 9.55 million barrels, up by 46,000 bpd from a week earlier and from 8.52 million bpd a year earlier.
The EIA data is largely in line with U.S. export data calculated by French energy data provider Kpler. Kpler, which tracks crude oil cargoes globally, noted that the biggest portion of these higher exports went to Europe, which is a bit surprising given that Asia has been hailed as the main destination for U.S. crude.
At 914,000 bpd, U.S. oil shipments to Europe in the week to October 27 rose by 572,000 bpd from the prior week, signaling growing demand for U.S. crude on the continents, Kpler said. At the same time, shipments to Asia have been on the decline. Over the six weeks between September 22 and October 27, Kpler said, shipments to Asia declined by 357,000 bpd or 54 percent.
U.S. exports are seen to continue growing at a healthy rate, displacing OPEC from its key market in Asia. The cartel’s hands are bound by the production cut agreement sealed late last year, and U.S. producers are now taking advantage of the larger spread between Brent and West Texas Intermediate to market their light crude, so similar to Middle Eastern grade, to Asian refiners.
Last year, the top 10 destinations for U.S. crude were led by Canada, with the Netherlands a distant second, and Curacao at number three. In the first seven months of this year, Canada’s share of U.S. exports fell from 60.7 percent to 34 percent, while China’s share rose from 3.7 percent to 20 percent as of July 2017.
This share could rise further: earlier this month, sources told Reuters that China’s—and the world’s—top oil refiner, Sinopec, was planning two projects in the U.S. that would expand export capacity on the Gulf Coast. One of the projects involves the construction of a pipeline to carry crude from the Permian to the Gulf Coast, and a loading terminal capable of loading VLCCs, which can carry up to 2 million barrels of oil.
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