- Experts expects spike in U.S. crude exports;
- Estimated 600,000 and 700,000 U.S. Permian crude export in Q4;
- U.S. production averages 9.2 million bpd and 9.7 million bpd in 2018;
The current boom in production in U.S. Permian plus affordable pipeline and railway transportation charges to the Gulf of Mexico will improve the U.S. already high crude oil exports significantly, said Mike Loya, head of Americans business at oil trading giant, Vitol Group on Friday.
Loya said “We will see a lot more growth in the U.S. crude exports,” the manager of Vitol noted in an interview published by Bloomberg.
Just after sanctions were lifted off Vitol on oil exports in 2015 it handled the first U.S. cargo that exported crude to customers in countries like Venezuela, China, Italy, and Israel.
The oil giant Vitol believes Asia will be a major destinations for U.S. crude oil after its expansion to the Caribbean markets, Latin America and Europe.
Vitol’s Loya noted that the Permian crude production would spike by almost 600,000 bpd and 700,000 bpd by the Q4 of this year, and “a lot of that is going to be exported”.
According to the EIA’s report U.S. crude oil production is projected to average 9.2 million bpd this year and 9.7 million bpd in 2018, compared to an estimated 8.9 million bpd pumped in 2016.
The EIA’s most recently published Drilling Productivity Report shows that the Permian is forecasted to include some 70,000 bpd to its production this month to reach about 2.250 million bpd.
Suppose exports continue with same rate exportation could help alleviate some of the record breaking inventories registered by the U.S.
The rate at which exports spiked off-late was due to the high cuts in discount of the West Texas Intermediate (WTI) against the Brent.
The manager of energy analysis at Platts Analytics, Tony Starkey noted:
“It’s pure economics. WTI/Brent finally widened enough to make some additional exports profitable since the export ban was lifted.”