While OPEC is implementing production cuts, U.S. crude oil exports are steadily growing and winning customers even in China. In February, China was the biggest buyer of U.S. light crude oil, overtaking Canada as the top destination of U.S. crude exports.
According to data by the U.S. Census Bureau crunched by Bloomberg, U.S. crude sales in China jumped almost fourfold in February compared to January, to 8.08 million barrels, versus the 6.84 million barrels of oil that Canada imported from the U.S., which was a 20-percent monthly drop.
U.S. crude oil exports reached a record high of 31.2 million barrels in February, the data showed.
U.S. crude oil exports to China started surging in November last year, according to data by the EIA available through January this year. In January, China bought 2.003 million barrels of U.S. crude.
By comparison, U.S. oil exports to Canada stood at 8.538 million barrels in January, compared to 6.064 million barrels in December last year.
John Auers, executive vice president at energy consultant Turner Mason & Co, commented for Bloomberg on the development: "The U.S. is a larger exporter of crude than many OPEC countries. That China is buying more means that the U.S. has become a larger player in the global crude export market." Related: World's Biggest LNG Exporter Just Raised The Stakes
Two of the main reasons for the high U.S. exports and increased Chinese buying of U.S. crude were the seasonal refinery maintenance in the U.S. Gulf Coast, and the Dubai benchmark for Asia becoming more expensive due to the OPEC production cuts, Auers reckons. This has opened an arbitrage window for U.S. grades to be shipped to Asia.
In a sign that China buying U.S. crude will continue after February, China's Sinopec has bought 1 million barrels of the U.S. Mars Blend crude for loading in April, a person familiar with the plans told Bloomberg.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More