Comprehensive  Ghana Oil and Gas news, information, updates, analysis


NEWS

U.S. may export more oil in 2017 than 4 Opec nations produce

  • POSTED ON: February 2, 2017
  • AUTHOR: Editor
  • CATEGORY:

oil-rigU.S. crude exports are poised to surpass production in four OPEC nations in 2017 and may grow even more if President Donald Trump honors pledges to ease drilling restrictions and maximize output.

The world’s largest oil-consuming country could sell as much as 800,000 barrels a day of crude overseas this year, according to four analysts surveyed by Bloomberg. That’s more than OPEC producers Libya, Qatar, Ecuador and Gabon each pumped in December. The U.S. exported 527,000 barrels a day in the first 11 months of 2016, Energy Information Administration data show.

Chalk it all up to a resurgence in shale oil and gas, which Trump is counting on to create jobs and rebuild roads, schools and bridges. U.S. output will rebound to more than 9 million barrels a day in 2017 after sliding 5.6 percent to 8.87 million in 2016, the EIA estimates. And since restrictions on U.S. crude exports were lifted in late 2015, domestic producers are free to seek buyers in Europe, Asia and Latin America, which are on the lookout for alternate suppliers after OPEC and non-OPEC producers agreed to trim 2017 output.

“Godzilla is even taller in person,” Vikas Dwivedi, senior analyst at Macquarie Capital (USA) Inc., said in a telephone interview from Houston. “U.S. production will be bigger than most people are expecting.”

Macquarie sees annual output reaching 9.37 million, while Turner, Mason & Co. and Lipow Oil Associates each put it around 9 million. Wood Mackenzie forecast a more-conservative 8.75 million.

Price Pressure

The increased supply is likely to pressure prices of domestic crude, including the benchmark West Texas Intermediate grade, making it more globally competitive, said Afolabi Ogunnaike, Wood Mackenzie’s Houston-based senior research analyst for Americas refining and oil product markets. WTI was $2.89 a barrel cheaper than European benchmark Brent crude on Jan. 31, the widest discount since December 2015.

But why seek markets abroad when the U.S. is still one of the world’s biggest crude importers, has abundant and inexpensive oil on the horizon and has inaugurated a new president with the stated goal of weaning the country off crude from the Organization of Petroleum Exporting Countries? Because it makes business sense.

The U.S. imported 7.88 million barrels a day of crude in the first 11 months of 2016, including about 3 million from OPEC. And in the first week of January, the country sent a record amount overseas, according to the EIA.

That’s because U.S. refiners were designed to process relatively cheap high-sulfur and high-density crudes produced in Canada and parts of the Middle East and Latin America. They’re not set up to handle the low-sulfur, less dense crude being produced in Texas’ Permian Basin and Eagle Ford regions, where most of the U.S. output growth has occurred.

“If the U.S. system can’t take the crude it produces, it will have to export it,” Macquarie’s Dwivedi said.

Source: http://www.classfmonline.com/1.10728558

Share this article

Leave a reply

About Us
Reporting Oil and Gas project was launched on 4th June 2009 at Takoradi, Western Region, Ghana by Penplusbytes (www.penplusbytes.org) with the vision of providing a one stop online information and knowledge about Ghana’s oil and gas sector read more
Events Calendar
<< Oct 2017 >>
MTWTFSS
25 26 27 28 29 30 1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30 31 1 2 3 4 5
Twitter Activity Stream
 

Partners We are proud to be associated with:

Skip to toolbar