August 07:
Exports of crude oil from US shores jumped in June to the highest since the 1950s, according to US data, topping Opec member Ecuador in supplying global markets and underscoring the dramatic shift in global flows.
Exports jumped 35 per cent from May to 389,000 barrels per day in June, almost all of that sent to Canada, according to data from the US Census Bureau released on Wednesday. That’s more than Ecuador, the smallest producer in the Organisation of the Petroleum Exporting Countries with overseas sales of some 354,000 bpd in 2012, according to government data.
The June surge of more than 100,000 bpd is the biggest monthly rise since the onset of the US shale oil revolution, which has unlocked billions of barrels of reserves and fueled a production boom that has the potential to exceed domestic demand. The rise shows that US crude from places such as North Dakota and Texas is finding more buyers in Canada, particularly on the Atlantic Coast where refiners are still dependent on costlier Brent-linked crude from the North Sea or West Africa. Although a decades-old US law generally bars exports of domestically produced crude, shipments to Canada are broadly allowed, as are re-exports of foreign oil.
But a growing excess of particularly light crude is prompting companies to find ways around the ban, including by lightly processing a super-light form of oil known as condensate in order to get around restrictions on raw crude. The first such cargo sailed from Texas bound for east Asia in late July .
The rise in exports may level out soon due to congestion on US railway lines that now handle a tenth of US oil production, according to Dr Philip K. Verleger, Jr., president of consultancy PKVerleger LLC. Some of North Dakota’s Bakken oil is sent by rail thousands of miles to the Canadian east coast. “Export figures will probably slow down in the fall because the railroads are going to run into a capacity problem,” he said.
The Customs data showed 6,000 bpd went to Singapore and 5,000 bpd to Switzerland. These cargoes were likely re-exports, probably of Canadian oil, market sources say. Small-scale exports to Switzerland first emerged in April. The shipments to Singapore, classified as under 25 degrees API, also known as heavy crude, appeared to be the first on record.
June is the first month that exports have leapfrogged above their previous recent peak in the 1970s. They hit their highest since April 1957, in the aftermath of the Suez Crisis when the nationalization of the canal caused the United States to increase crude shipments to Europe. Despite the June increase, the United States remains a large net importer of crude, buying some 7.5 million bpd over the past week.
Source: www.khaleejtimes.com/biz/inside.asp?xfile=/data/market/2014/August/market_August6.xml§ion=market
Exports of crude oil from US shores jumped in June to the highest since the 1950s, according to US data, topping Opec member Ecuador in supplying global markets and underscoring the dramatic shift in global flows.
Exports jumped 35 per cent from May to 389,000 barrels per day in June, almost all of that sent to Canada, according to data from the US Census Bureau released on Wednesday. That’s more than Ecuador, the smallest producer in the Organisation of the Petroleum Exporting Countries with overseas sales of some 354,000 bpd in 2012, according to government data.
The June surge of more than 100,000 bpd is the biggest monthly rise since the onset of the US shale oil revolution, which has unlocked billions of barrels of reserves and fueled a production boom that has the potential to exceed domestic demand. The rise shows that US crude from places such as North Dakota and Texas is finding more buyers in Canada, particularly on the Atlantic Coast where refiners are still dependent on costlier Brent-linked crude from the North Sea or West Africa. Although a decades-old US law generally bars exports of domestically produced crude, shipments to Canada are broadly allowed, as are re-exports of foreign oil.
But a growing excess of particularly light crude is prompting companies to find ways around the ban, including by lightly processing a super-light form of oil known as condensate in order to get around restrictions on raw crude. The first such cargo sailed from Texas bound for east Asia in late July .
The rise in exports may level out soon due to congestion on US railway lines that now handle a tenth of US oil production, according to Dr Philip K. Verleger, Jr., president of consultancy PKVerleger LLC. Some of North Dakota’s Bakken oil is sent by rail thousands of miles to the Canadian east coast. “Export figures will probably slow down in the fall because the railroads are going to run into a capacity problem,” he said.
The Customs data showed 6,000 bpd went to Singapore and 5,000 bpd to Switzerland. These cargoes were likely re-exports, probably of Canadian oil, market sources say. Small-scale exports to Switzerland first emerged in April. The shipments to Singapore, classified as under 25 degrees API, also known as heavy crude, appeared to be the first on record.
June is the first month that exports have leapfrogged above their previous recent peak in the 1970s. They hit their highest since April 1957, in the aftermath of the Suez Crisis when the nationalization of the canal caused the United States to increase crude shipments to Europe. Despite the June increase, the United States remains a large net importer of crude, buying some 7.5 million bpd over the past week.
Source: www.khaleejtimes.com/biz/inside.asp?xfile=/data/market/2014/August/market_August6.xml§ion=market
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