• 6 minutes Trump vs. MbS
  • 11 minutes Can the World Survive without Saudi Oil?
  • 15 minutes WTI @ $75.75, headed for $64 - 67
  • 10 hours US top CEO's are spending their own money on the midterm elections
  • 7 hours EU to Splash Billions on Battery Factories
  • 7 hours The Dirt on Clean Electric Cars
  • 17 hours Petrol versus EV
  • 2 hours Satellite Moons to Replace Streetlamps?!
  • 12 hours OPEC Is Struggling To Deliver On Increased Output Pledge
  • 9 hours The Balkans Are Coming Apart at the Seams Again
  • 23 hours E-mopeds
  • 7 hours Uber IPO Proposals Value Company at $120 Billion
  • 10 hours A $2 Trillion Saudi Aramco IPO Keeps Getting Less Realistic
  • 14 hours 10 Incredible Facts about U.S. LNG
  • 13 hours U.N. About Climate Change: World Must Take 'Unprecedented' Steps To Avert Worst Effects
  • 1 day These are the world’s most competitive economies: US No. 1
Leaked Document: OPEC+ Struggling To Lift Oil Production

Leaked Document: OPEC+ Struggling To Lift Oil Production

An internal OPEC document suggests…

Oil Trading Firm Expects Unprecedented U.S. Crude Exports

Oil

U.S. crude oil exports hit an all-time high at the end of September, and are poised to surge even more to hit unprecedented levels in the coming two or three weeks, Marco Dunand, chief executive of trading house Mercuria, told the Reuters Global Commodities Summit on Friday.  

U.S. crude oil exports hit a record-high of 1.98 million bpd in the week to September 29, EIA data showed. This was the highest weekly average since the U.S. removed restrictions on crude oil exports at the end of 2015, after a four-decade ban. Oversupply due to Harvey drove the higher exports, but most of all, it is the wide spread of around $6 between WTI and Brent prices that drives buyers to lust after the cheaper U.S. crude grade. The spread is also wide enough to offset shipping costs to destinations like Asia and Europe.

Mercuria’s Dunand thinks that the excess U.S. crude oil stocks will trigger more record highs over the next month, and American oil exports could reach 2.2 million bpd.

“Looking at the vessel fixtures of recent times, I think we’re going to see record exports over the next month,” Dunand told the Reuters summit.

“I think the volume that’s going to be exported from the U.S. in the next two or three weeks is unprecedented in size,” the manager noted.

According to Dunand, while product stocks in the U.S. are more or less in line, America’s crude inventories are in excess.

“The rest of the world, crude stocks are more or less in line. The excess of crude stocks to rebalance the market naturally has to find its way,” he said, adding that Europe and Asia would buy that excess U.S. barrels.  

Apart from the wide Brent-WTI spread, the futures curve structures are also indicative of future oil flows. Brent flipped into backwardation recently, much to the joy of OPEC, while WTI is still in a contango.

Related: The Next Big Digital Disruption In Energy

“If you have backwardation in Dubai, backwardation in [Brent] and a contango in WTI, it’s telling you that some of the WTI excess has to move to other places,” Dunand said.

The manager, however, doesn’t see oil prices under much pressure due to the record U.S. exports, because the market is ready to absorb the oil, which for many buyers is the cheapest now. 

“The refiner will go and buy the cheapest possible barrels,” Dunand said.

By Tsvetana Paraskova for Oilprice.com

More Top Reads from Oilprice.com:


x

Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News