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Surging worldwide demand, supply outages and international
political tension have stoked worries around crude supplies,
boosting oil prices to the highest levels in seven years, with
some predicting crude could even reach $100 per barrel. That has
brought in more buyers of U.S. oil, increasing exports and
decreasing domestic crude stockpiles.
U.S. seaborne crude exports have increased in recent weeks and
are close to 3 million barrels per day so far this month,
according to Matt Smith, lead oil analyst for the Americas at
Kpler. That's just under the 3.2 million bpd average in crude
exports in December, which was the strongest month since
February 2020, he said.
Cargoes booked for February are headed to numerous countries
including China, South Korea and India, Refinitiv Eikon shipping
data showed. Those three are among the largest regular buyers of
U.S. crude. Global demand in Asia in 2022 is expected to rise 4%
to 37.2 million bpd, the International Energy Agency said
Thursday, making it the only major region ahead of 2019's pace.
"The exports are underpinning the market now," said John Kilduff,
a partner at Again Capital Management in New York. "I expect the
3 million-per-day number to sort of become the norm."
Exports have helped reduce crude stockpiles in the U.S. Gulf
Coast to as low as 220.3 million barrels earlier this month,
which was a two-year low.
Increased vehicle traffic means lighter barrels from the United
States, which produce a higher volume of gasoline, are
attractive to buyers. The IEA said Thursday it expects worldwide
gasoline demand to rebound to 26.3 million bpd - just 1% lower
than 2019's consumption.
Supply hiccups from countries like Libya, which had temporary
production outages starting in December, shifted U.S. exports to
countries in Europe.
In December, the United States shipped around 2.3 million
barrels of crude to Italy, Refinitiv Eikon data showed, up from
1.6 million in November.
"Everyone is seeing really strong demand growth numbers for this
year, and when you look at where supply growth is coming through
from, the U.S. is a leader there," Smith said.
Crude output from major U.S. shale formations is due to rise to
8.54 million bpd in February, the highest since March 2020,
according to the Energy Information Administration. Of that, the
Permian Basin's output is set to reach 5.1 million bpd, also a
record.
(Reporting by Stephanie Kelly; Editing by Cynthia Osterman)
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