Toyota’s revenue and earrings are…
Even though the IEA cut…
Rising production in the Permian, coupled with cheap pipeline and railway transport fees to the Gulf of Mexico, will enable the U.S. to significantly raise its already record-high crude oil exports, Mike Loya, head of the Americas business at oil trading giant Vitol Group, told Bloomberg in an interview published on Friday.
“We will see a lot more growth in U.S. crude exports,” said the manager of Vitol, the company that handled the first U.S. cargo after restrictions on oil exports were lifted at the end of 2015.
Since the restrictions were lifted, U.S. crude oil has reached customers in various regions around the world, including buyers in Venezuela, China, Italy, and Israel.
Vitol’s Loya believes that Asia will be increasingly one of the top destinations for U.S. crude oil, after the initial expansion to the Caribbean markets, Latin America, and Europe.
According to Loya, the Permian crude production would increase by between 600,000 bpd and 700,000 bpd by the end of this year, and “a lot of that is going to be exported”.
The EIA currently expects U.S. crude oil production to average 9.2 million bpd this year and 9.7 million bpd next year, compared to an estimated 8.9 million bpd pumped in 2016. The Administration’s latest Drilling Productivity Report shows that the Permian is expected to add 70,000 bpd to its production this month to reach 2.250 million bpd.
Related: How Much Further Can Oil Prices Fall?
In terms of exports, in two weeks in February, U.S. crude exports soared to above 1 million bpd – 1.026 million bpd in the week of February 10, and 1.211 million bpd in the week of February 17, EIA data shows.
Should exports keep their pace, they could help alleviate some of the record-breaking inventories piled up in the U.S.
The high exports pace recently is also the result of the deeper discount of WTI against Brent.
According to Tony Starkey, manager of energy analysis at Platts Analytics:
“It’s pure economics. WTI/Brent finally widened enough to make some additional exports profitable since the export ban was lifted.”
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.