increased by nearly 2 million barrels per day in one week.
The U.S. exported a record amount of crude oil and fuel last week, even as the U.S. East Coast struggles to cope with diesel and gasoline shortages.
According to U.S. Energy Information Administration (EIA), U.S. oil exports reached 11.4 million barrels per day last week, an increase of nearly 2 million barrels per day from the previous week. Among them, gasoline and diesel exports jumped to two-week highs. Meanwhile, domestic fuel stocks in the United States are at seasonal historical lows, and some areas on the east coast of have exhausted supply or implemented ration supply.
This imbalance highlights the difficulty of transferring fuel from Gulf of Mexico coastal refining centers to East Coast consumption centers. Under the Jones Act, water transportation between the U.S. coasts are restricted. The bill is a century-old law that could increase the cost of shipping to U.S. ports. Given that fuel prices are already so high and global markets are so tight, shippers can make more money by selling fuel overseas than supplying them to the domestic market.
Source: Zitu.com
At the same time, imports from energy-deficient Europe are slowing down. But the United States is still a major oil importer. Last week, the United States imported an average of 6.2 million barrels of crude oil per day from Canada and Saudi Arabia and other countries. Some of the crude oil will be refined into gasoline or diesel and will be exported again.
As winter enters, U.S. fuel stocks are so low, it has been a key focus for the Biden administration preparing for the midterm elections. The Biden administration is considering other options that may increase domestic fuel supply, such as export restrictions.
Source: Zitu.com
According to an analysis released by WoodMackenzie on Tuesday, implementing export restrictions can save US consumers $5 billion in gasoline costs, but could increase diesel costs by European trading partners by $2 billion and erase US refineries’ $30 billion in revenue. U.S. Secretary of Energy Granholm wrote to refiners in August, calling on them to build fuel stocks to avoid "extra federal requirements or other urgent measures." The Biden administration said last week that “all options” are still on the table to “ensure domestic supply.”
In addition, in U.S. oil exports alone hit a new high of 5.1 million barrels per day in last week, and European imports were strong in October. But traders warned that the figure could be exaggerated due to the so-called adjustment factors of the EIA, and the difference between the week's inventory figures and the figures implied by production, refinery demand, imports and exports was also at record highs.
Source: Zitu.com
Analysis said that the surge in U.S. exports highlighted the tightening of supply outlook , coupled with the weakening of the US dollar, oil prices rose for the third consecutive day. Warren Patterson, head of strategy for commodities , said:
"The recent weakness of $5 has provided some good winds for the oil market, while the decline in U.S. gasoline inventories and record oil exports will only further boost oil prices. As for the outlook, it will largely depend on how the macro situation evolves, but oil fundamentals look increasingly constructive in the coming months, which suggests prices will rise." The calendar spread of crude oil continues to maintain a bullish counter-spread structure, indicating that supply is tight in the near future. Brent crude oil 's instant spread (the spread between the closest two contracts) was $1.89 per barrel, up from $1.40 a month ago.
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