The US Crude Export Chronicles: September 2022

 The US Crude Export Chronicles: September 2022by Amanda Hilow*

Spot crude prices made large swings at the US Gulf coast during the October trade month amid a backdrop of shifting international supply and demand fundamentals

Hot topics

Fresh demand materializing out of Asia-Pacific — particularly India and China — propped up waterborne spot crude prices at the start of the month, before rising domestic supply coupled with European refinery disruptions and higher Libyan output deteriorated arbitrage economics. WTI fob Houston fell relative to month-two Ice Brent, the prompt contract used to price waterborne cargoes, over the course of September to its lowest level since May 2020 by 23 September, the final day of the October trade month.

WTI fob Houston diff to Ice Brent

Two upcoming sales of crude from the US Strategic Petroleum Reserve (SPR) are expected to offset a recent decision by Opec+ to lower production targets starting next month. The US most recently offered to sell another 10mn bl of sweet crude from the SPR for delivery in November. That will leave 15mn bl available to sell under the 180mn bl authorization.

Census snapshot

Additional crude supply from the SPR in recent months has helped sate the domestic refining appetite, leaving more light sweet crude production from the Permian basin available for export purposes.
Total US crude exports climbed by 224,000 b/d to a record high of 3.8mn b/d in July, according to the latest available monthly statistics by the US Census Bureau. Shipments to Europe comprised roughly 45pc of total outbound flows, stepping in for lost Libyan crude supply earlier in the year, while Mediterranean and northwest Europe refiners sought out alternative supplies to their traditional import slates.

Libya is planning to increase exports of Es Sider crude to roughly 277,000 b/d in October, inching higher from an estimated 273,000 b/d in September, which could edge out some WTI supplies to Europe. Libya's state-owned NOC has managed to keep crude output stable since lifting force majeure restrictions on operations at several of its eastern terminals and onshore fields in mid-July.

*Argus Media Deputy Crude Editor

(by, 03 October, 2022)

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