In March, US oil exports to Europe set a record with sharp discounts – #March #oil #exports #Europe #set #record #sharp #discounts

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HOUSTON, 20 March (Reuters) – USAU.S. crude oil exports to Europe have averaged a record 2.1 million barrels per day so far this month, helped by broad discounts to the global benchmark and USA the weakening of oil demand of oil refineries gave impetus.

This month Europe and record exports to China USAreflects its rise in crude oil trade and reinforces its role as a supplier to Europe following Russia’s aggression in Ukraine.

The holiday freeze shut down dozens of U.S. refineries, increased scheduled plant maintenance and reduced crude demand, extending the discount to Brent U.S. crude.

Matt Smith, an analyst at Kpler, said the slowdown in oil refining weighed on US West Texas Intermediate crude prices, while Brent was supported by lower Russian barrel availability and difficulties related to Norway’s Johan Sverdrup flow.

The spread between West Texas Intermediate and Brent widened to more than $7 in late January, the sharpest decline this year, prompting deals as the wider spread made U.S. oil cheaper for foreign buyers.

According to Kpler data, the volume of European crude loaded onto very large crude carriers (VLCCs), which typically carry around 2 million barrels, will reach a record this month.

The Advantage Virtue, a VLCC chartered by BP ( BP.L ) and loaded in Corpus Christi, Texas on March 11, was bound for Britain and set to discharge later this month, according to Refinitiv Eikon data.

Front Alta, another VLCC chartered by Occidental Petroleum, headed for Rotterdam, according to Refinitiv and Kpler vessel tracking data.

Occidental declined to comment. BP declined to comment on exports, but pointed to an energy outlook that predicts rising U.S. oil production for the rest of this decade before tapering off and competing for OPEC’s market share.

Export demand has helped some high US commodity prices. The average price of WTI Midland oil, fixed in the top US shale basin, is up about 50% this year compared to the previous quarter, and WTI in East Houston is up about 30%.

Exports should remain strong in the coming months as long as the Brent-WTI spread remains wide, Kpler’s Smith said.

Although domestic demand will increase in the coming months as the refinery cycle season ends and summer ridership increases, offer will also increase. US shale producers are adding to supplies and Biden administration must sell 26 million barrels of crude oil from the Strategic Petroleum Reserve, according to a release approved by Congress.

Reporting by Arathy Somasekhar in Houston; Edited by Richard Chang

Our standards: Thomson Reuters Trust Principles.

2023-03-21 00:25:05
Source – reuters

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