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US Crude Oil Exports Reached a New Record Again

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US crude oil exports  

The EIA estimates that US crude oil exports increased by 689,000 bpd (barrels per day) to a record high of 2,566,000 bpd on May 4–11. The exports also increased by 1,480,000 bpd or ~136% year-over-year.

Crude oil exports have been increasing since the oil export ban was lifted. The exports were also supported by increased domestic crude oil production and a wider spread between Brent and WTI crude oil prices.

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Brent-WTI crude oil spread

The price difference between active Brent and WTI crude oil futures was at $7 per barrel on May 21. The price difference between Brent and WTI oil futures is called “the spread.” The spread was at $5.4 per barrel on May 7.

The widening Brent-WTI spread benefits crude oil refiners in the US. When the Brent-WTI spread is wider, US refiners’ input costs are lower compared to international peers. Lower input costs compared to higher output prices also benefit refiners.

The VanEck Vectors Oil Refiners ETF (CRAK) seeks to follow the performance of the MVIS Global Oil Refiners Index. CRAK rose 3.7% on May 7–21, while the Brent-WTI spread rose 30% during the same period.

PBF Energy (PBF), HollyFrontier (HFC), and Delek US Holdings (DK) rose ~19%, ~15%, and ~10%, respectively, on May 7–21. These stocks account for 8.6% of CRAK’s holding. These stocks were among the top percentage gainers in CRAK’s portfolio on May 7–21.

Impact 

The widening Brent-WTI spread and record US crude oil output could boost US crude oil exports. High US oil exports could benefit WTI oil prices and pressure Brent oil prices. Higher exports could cause the Brent-WTI spread to narrow.

Next, we’ll discuss Saudi Arabia’s crude oil production.

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