Rising Crude Exports | Russell T. Rudy Energy LLC
“World Oil” reports that Mike Loya, with crude trading firm Vitol, predicts a significant increase in U. S. crude oil exports. Vitol, which shipped the first cargo of domestic crude after the 40-year old export ban had been lifted, notes that exports already reached 1.21 million barrels of oil per day (bopd) in February. Loya, who has 25 years of experience, sees exports from the American Southwest being driven by surging production, cheap transportation and discounted prices to Brent (North Sea) oil.
Loya anticipates production from the Permian Basin of West Texas and Southeast New Mexico surging by another 600,000-700,000 bopd by the end of this year. Output is also increasing in Oklahoma’s SCOOP ad STACK plays. These areas are already connected with Gulf Coast ports by an established rail and pipeline infrastructure which provides for efficient and cheap transportation. Finally, WTI (West Texas Intermediate) and other domestic grades of crude trade at a discount to Brent. This makes export to other Atlantic Basin markets attractive to traders such as Trafigura Group and Mercuria Energy. However, BP, ExxonMobil and other major oil companies are getting in the act as well.
Domestic production is already being exported to customers ranging from Venezuela and Israel to China and Italy. Loya thinks that Asia will become an important market for U. S. crude after further expansion into the Caribbean, Latin American, and European markets.
Apparently, relieving pressure on domestic crude storage facilities would be an additional benefit of increased crude exports. Last week stockpiles in the U. S. rose to the highest levels since 1930. According to the U. S. Energy Information Administration, inventories rose to a record 528.4 million barrels, a significant increase over 490.8 million a year ago.
To read the article in its entirety, please go to http://www.worldoil.com/news/2017/3/10/oil-trader-vitol-foresees-a-lot-more-growth-in-us-crude-exports .
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