Home / US turns into 'oil nation' with record exports
Friday, 24 February 2017
US turns into 'oil nation' with record exports
The US exported a record amount of crude oil, topping a million barrels a day for a second week and filling the gap in world markets created by OPEC cutbacks.
Shale and other US producers sent 1.2 million barrels of crude oil onto world markets last week, up nearly 200,000 barrels a day from the week earlier and about 350,000 barrels above the four-week average, according to Energy Information Administration data. Until recently, the US was exporting about 500,000 barrels a day.
"OPEC's got a competitor. No doubt about it," said Kyle Cooper, a consultant with Ion Energy Group. "They certainly have to be concerned with US oil producers eating into their market share."
US producers have also ramped up production to 9 million barrels a day last week, a level last seen in April 2016. The new production is increasing even as the U.S stockpiles continue to grow. According to EIA, oil supplies grew for a seventh week, adding a smaller than expected 564,000 barrels.
"OPEC is definitely looking over its shoulder at these rising numbers of exports, and it's undermining their efforts on a daily basis," said John Kilduff of Again Capital. "Some of it's going to Asia. China is one of the more unusual buyers in there. The shale guys are filling the gap of the very cuts that were put in place by the market."
The Oil Producing and Export Countries and non-OPEC producers, like Russia, agreed to cut about 1.8 million barrels a day from the world market in an effort to stabilize oil prices.
Oil has been holding above $50 per barrel since OPEC reached the output deal in December. The market has been giving the producers high marks for compliance with the deal, with a recent Bloomberg report quoting OPEC sources saying they have 90 percent compliance and non-OPEC 70 percent. OPEC removed about 890,000 barrels a day from the world market in January.
Cooper said some of OPEC's compliance was easy to achieve due to planned maintenance in January.
The US exports alone totaled more than the production of a number of OPEC countries, like Algeria, Libya, Gabon, Qatar and Ecuador, according to Andrew Lipow, president of Lipow Oil Associates.