MOL to Equip LR1 Tanker with Carbon Capture System
Mitsui O.S.K. Lines will equip its LR1 product tanker, Nexus Victoria, with the an onboard CO2 capture system. The installation will mark the first commercial installation of a CO2 capture...
By Arathy Somasekhar
HOUSTON, March 20 (Reuters) – U.S. crude exports to Europe have hit a record 2.1 million barrels per day on average so far this month, spurred by wide discounts to the global benchmark and weaker oil demand by U.S. refineries.
Record exports to Europe and China this month reflect the rise of United States in crude oil trade and solidifies its role supplying Europe following Russia’s invasion of Ukraine.
A holiday freeze knocked out operations at a dozen U.S. refineries, increasing scheduled plant maintenance and reducing crude oil demand that widened U.S. crude’s discount to benchmark Brent.
The refining slowdown weighed on U.S. West Texas Intermediate oil prices, while Brent was supported by declining availability of Russian barrels as well as complications with Norway’s Johan Sverdrup flows, Kpler analyst Matt Smith said.
The spread between West Texas Intermediate and Brent widened to more than $7 at the end of January, the steepest discount so far this year, prompting a flurry of deals as a wider spread makes U.S. oil cheaper for foreign buyers.
Volumes of crude oil to Europe, loaded on very large crude carriers (VLCC) that typically carry about 2 million barrels, this month look set to reach a record high, according to Kpler data.
Advantage Virtue, a VLCC chartered by BP and loaded at Corpus Christi, Texas, on March 11, was headed to Britain and set to discharge at the end of this month, according to Refinitiv Eikon data.
Front Alta, another VLCC chartered by Occidental Petroleum, was headed to Rotterdam, according to Refinitiv and Kpler ship tracking.
Occidental declined to comment. BP declined to comment on exports, but pointed to its energy outlook forecasting U.S. oil production growth over the rest of this decade before declining and OPEC competing to increase its market share.
Export demand has aided prices for some top U.S. crude grades. The average price for WTI Midland, pegged at the top U.S. shale basin, has gained nearly 50% so far this year compared to the previous quarter, while WTI at East Houston has gained about 30%.
Exports should remain strong in the months ahead as long as the Brent-WTI spread remains wide, Kpler’s Smith said.
While domestic demand is set to rise in the coming months as refinery turnaround season ends and summer driving picks up, supply is also set to increase. U.S. shale producers have been adding to supplies and the Biden administration is due to sell 26 million barrels of crude oil from the Strategic Petroleum Reserve under a congressionally approved release.
(Reporting by Arathy Somasekhar in Houston; Editing by Richard Chang)
(c) Copyright Thomson Reuters 2023.Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.
Join the 105,963 members that receive our newsletter.
Have a news tip? Let us know.
Access exclusive insights, engage in vibrant discussions, and gain perspectives from our CEO.
Sign UpMaritime and offshore news trusted by our 105,963 members delivered daily straight to your inbox.
Essential news coupled with the finest maritime content sourced from across the globe.
Sign Up