US oil producers find customers in Asia while OPEC ponders more cuts

US oil

The Almi Star is carrying US oil to a refinery in Japan. ShipSpotting.com photo.

US oil exports could reach 1 million b/d in May: Traders

This week, as OPEC considers extending its supply cut agreement, at least eight tankers carrying around 10 million barrels of US oil are en route to Asia, according to shipping data and trade sources.

US producers are taking advantage of favourable prices recently to increase production by 10 per cent to 9.3 million barrels per day (b/d) and to ship some of their crude to sought after clients in Asia.

Reuters reports one of the eight tankers is carrying the first ever cargo of Southern Green Canyon crude purchased by Cosmo Energy, a Japanese refiner.  A second tanker is transporting the first Alaskan North Slope crude to arrive in Asia in eight months.

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US oil producers eating into the market share of OPEC members may prove to be a challenge to the group as it negotiates an extension of the pact that has seen participants cut their oil production by 1.8 million b/d.

OPEC members have remained focussed on keeping their market share with Asian refiners, but exports of relatively cheap US crude have increased.

Traders expect that in May, US oil exports could reach about 1 million b/d, with a high percentage of that going to Asia.  US government data shows that US crude exports reached 1.09 million b/d, the third highest amount on record.  Should the numbers remain high, they could surpass the record 1.2 million b/d recorded in February.

“We expect that momentum to continue when (Dakota Access Pipeline) opens and as more Permian production hits Corpus Christi docks,” Sandy Fielden, director of oil and products research at Morningstar told Reuters.

 

 

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