US Crude Oil Exports Could Rise in the Coming Weeks

US crude oil exports  

The EIA (U.S. Energy Information Administration) estimates that US crude oil exports decreased ~51.2% to 1.3 million barrels per day on July 20–27. However, the exports increased 87% year-over-year.

US oil exports have been increasing since the oil export ban was lifted. The exports were also supported by the rise in domestic oil production and a wider Brent-WTI spread.

US Crude Oil Exports Could Rise in the Coming Weeks

Brent-WTI crude oil spread  

The price difference between Brent (BNO) and WTI (USO) crude oil futures was at $4.73 per barrel on August 1. The price difference between Brent and WTI oil futures is called “the Brent-WTI spread.” The spread was at $4.63 per barrel on July 25. The widening spread encourages crude oil exports from the US. The wider spread also benefits crude oil refiners in the United States.

The Brent-WTI spread hit $11.4 per barrel on June 7—the highest level since February 27, 2015. However, US crude oil exports reached a record high of 3,000,000 bpd (barrels per day) in the week ending June 22. US crude oil exports follow the Brent-WTI spread with a lag.

In the last five trading sessions, the Brent-WTI spread has widened. The wider spread suggests that exports could rise in the coming weeks. Pioneer Natural Resources (PXD) increased its crude exports to ~90,000 bpd during the first quarter. The company plans to export up to 150,000 bpd by the end of 2018. Continental Resources (CLR) also plans to export crude oil overseas.

Next, we’ll discuss US gasoline inventories.