WTI crude prices are in the $43.00/b-$43.50/b range this morning. Prices strengthened modestly on Friday, closing at $43.01/b, which was a gain of $0.21 for the day. The week as a whole nonetheless ended in the red, down by $1.67 between Monday’s opening and Friday’s close. WTI opened at $43.16/b today, up by $0.36, or 0.84%, above Friday’s opening price. WTI is currently $43.09/b, up by $0.08 from Friday’s closing price.
Diesel opened at $1.3765/gallon this morning. This was an increase of 0.44 cents (0.32%) above Friday’s opening price. Diesel prices ended last week down by 5.15 cents per gallon. Current prices are $1.3746/gallon, up by 0.29 cents from Friday’s closing price.
Gasoline opened at $1.4352/gallon today. This was a small decline of 0.17 cents, or 0.12%, from Friday’s opening. Prices are $1.4364/gallon currently, up by 0.23 cents since Friday’s close.
Crude and product prices have posted losses for the last four weeks, with oversupply and hefty stockpiles continuing to weigh on the market. Last week, WTI crude prices threatened to fall through the $42/b floor, bringing the lowest prices since August 2016. Prices have crept up gradually since then, and they are managing to remain above $43/b.
WTI prices managed to regain the $43/b level even after Baker Hughes released its active rig count data on Friday. Eight additional rigs were added to the count, bringing the total to 941. This was the highest rig count in 26 months.
The U.S. Dollar Index opened lower this morning, with bullish investors retreating. Dollar weakness may be helping support oil prices. Fed Chair Janet Yellen is scheduled to make an address tomorrow, and four other Fed members are scheduled to make speeches during the week. The European Central Bank will be holding its annual forum in Portugal also. It will be a busy week for U.S. and European currencies.
U.S. total crude oil and petroleum product exports more than doubled from 2.4 million barrels per day (b/d) in 2010 to 5.2 million b/d in 2016. While exports of distillate, gasoline, propane, and crude oil have all contributed to the increase, growth rates and market drivers for each product have varied during this period (Figure 1).
Restrictions on exporting domestically-produced crude oil were lifted in December 2015, and in 2016, the United States exported 520,000 b/d. U.S. crude oil exports reached 1.1 million b/d, the highest monthly level recorded to date, in February 2017. While Canada remains the largest destination for U.S. crude oil exports, its share of total U.S. crude oil exports has declined, dropping from 92% in 2015 (427,000 b/d) to 58% in 2016 (301,000 b/d). Other leading destinations for U.S. crude oil exports in 2016 included the Netherlands, Curacao, China, Italy, and the United Kingdom. In addition to export restrictions, the level of U.S. crude exports are sensitive to price differentials, shipping costs, and the level of domestic production. U.S. production fell through the first nine months of 2016, but rose at the end of 2016 and the first five months of 2017. In 2016, U.S. crude oil exports increased 55,000 b/d over 2015, but year-over-year growth in both 2014 (217,000 b/d) and 2015 (114,000 b/d) were considerably higher (Figure 2).
U.S. exports of distillate also experienced slower year-over-year growth rates compared with recent years. In 2016, the United States exported 1.2 million b/d of distillate, the country’s largest petroleum product export. Between 2010 and 2016, U.S. exports of distillate grew by 81% (534,000 b/d), but most of this growth occurred between 2011 and 2013. The largest destination for U.S. distillate exports is Mexico, averaging 182,000 b/d in 2016, followed by Brazil (125,000 b/d), and the Netherlands (108,000 b/d).
U.S. exports of total motor gasoline have increased by 126% (425,000 b/d) since 2010. The growth in gasoline exports took place while domestic consumption, as measured by product supplied, was also increasing. Mexico is the top destination for U.S. total motor gasoline exports and the volume of gasoline trade is significant to U.S. refineries. Over the past five years, U.S. exports to Mexico accounted for between 44% (2014) and 53% (2016) of total U.S. gasoline exports.
Unlike the recently slowing increases in U.S. exports of crude oil, distillate fuel, and motor gasoline, propane export growth has recently accelerated. Propane exports differ from other U.S. petroleum exports with respect to where they are shipped. Whereas most other U.S. petroleum exports stay in the Western Hemisphere, Japan and China are the top destinations for U.S. propane exports. Propane has many non-transportation sector end uses, including space heating, cooking, and as a petrochemical feedstock.
The possibilities of this pace of growth continuing, the challenges each exported product face in the near future, and other questions, will be discussed at the upcoming EIA Energy Conference panel — Petroleum exports: Competing in the global market.