Vitol Warns U.S. Crude Exports Will Grow "A Lot More"

Tyler Durden's picture

Authored by Tsvetana Paraskova via OilPrice.com,

Rising production in the Permian, coupled with cheap pipeline and railway transport fees to the Gulf of Mexico, will enable the U.S. to significantly raise its already record-high crude oil exports, Mike Loya, head of the Americas business at oil trading giant Vitol Group, told Bloomberg in an interview published on Friday.

We will see a lot more growth in U.S. crude exports,” said the manager of Vitol, the company that handled the first U.S. cargo after restrictions on oil exports were lifted at the end of 2015.

Since the restrictions were lifted, U.S. crude oil has reached customers in various regions around the world, including buyers in Venezuela, China, Italy, and Israel.

Vitol’s Loya believes that Asia will be increasingly one of the top destinations for U.S. crude oil, after the initial expansion to the Caribbean markets, Latin America, and Europe.

According to Loya, the Permian crude production would increase by between 600,000 bpd and 700,000 bpd by the end of this year, and “a lot of that is going to be exported”.

The EIA currently expects U.S. crude oil production to average 9.2 million bpd this year and 9.7 million bpd next year, compared to an estimated 8.9 million bpd pumped in 2016. The Administration’s latest Drilling Productivity Report shows that the Permian is expected to add 70,000 bpd to its production this month to reach 2.250 million bpd.

In terms of exports, in two weeks in February, U.S. crude exports soared to above 1 million bpd – 1.026 million bpd in the week of February 10, and 1.211 million bpd in the week of February 17, EIA data shows.

Should exports keep their pace, they could help alleviate some of the record-breaking inventories piled up in the U.S.

The high exports pace recently is also the result of the deeper discount of WTI against Brent.

According to Tony Starkey, manager of energy analysis at Platts Analytics:

It’s pure economics. WTI/Brent finally widened enough to make some additional exports profitable since the export ban was lifted.”

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Sudden Debt's picture

Trump should promote American oil over those fucking Arab fagots who only use our money to attack us.

FUCK, LET'S TAKE THEIR OIL ALSO!! LET'S TURN IT ALL BACK INTO A COLONY!

Escrava Isaura's picture

Gee Whiz! Since when shale is considered crude oil?

Currently, US is importing about 8 million barrels of crude oil a day.

Even in natural-gas, which the US is the largest producer, US still has to import about 25%.

Wonder why the general public is so misinformed? Because of articles like this.

https://www.eia.gov/naturalgas/importsexports/annual/

https://www.eia.gov/dnav/pet/pet_sum_snd_d_nus_mbblpd_a_cur.htm

 

 

JimJinNJ's picture

maybe I misunderstand your point but the links you provided are 18 months (at least) out of date.

But I personally subscribe to Zeihan's thesis that the US will be energy self-sufficient quite soon based on fracking. 

Escrava Isaura's picture

2016 numbers are even worse because imports went up.

https://www.eia.gov/dnav/ng/hist/n9100us2a.htm

sinbad2's picture

The US could be energy self sufficient, but in a capitalist system, buyers will buy from the cheapest source.

Production costs are much lower in the ME and most of Russia, so they will always be cheaper than US supplies. The same applies to the various chemicals made from oil and gas, not only do Chinese plastic producers have lower operating costs, the raw material(oil) is also cheaper from Russia and the ME.

The only way out is for the US to go full bore communist, which will never happen, or for the price of the dollar to decline to a level where US production is competitive.

Escrava Isaura's picture

If it was up to the OPEC and Russia, the oil would be $500 dollars a barrel.

The only way US could be self-sufficient on oil is if the US becomes a third world nation, meaning, it’s GDP and living standards would have to collapse over 50%. More likely closer to 70%.

 

prime american's picture

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Fortunato's picture

Fracking is presently bankable because of NIRP. With the on going "Yellen put", the unprofitable cost of fracking will only deteriorate.

Oil production in the US is on easy money crack. It's unsustainable.

post turtle saver's picture

I would expect a country with the #1 refining capacity in the world to import a lot of oil and natural gas...

just because the US imports doesn't mean that all of it is used in the US...

Escrava Isaura's picture

The exports is about 5 million from products derived “gained” from crude oil.

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MTTEXUS2&f=A

Here’s another way of looking at this. And, again, the US still need to import crude oil. This is a fact that America cannot reverse. That’s why manufacturing jobs is a losing proposition for America, but the conservatives can’t hear it, because it’s too upsetting. So, they just block it. And, because of this conservative stubbornness, they might bring America down faster than otherwise.  

Gail Tverberg : “The USA produces 10Mbd of oil, but uses 18MBd,” isn’t really right, because the 18 MBD figure is an “all liquids” figure (which includes NGPL, ethanol, and “refinery expansion”), and the 10 MBD figure is a crude oil figure. The 10/18 ratio comes out to a little less than 56%. If we look at Btu figures for 2015, our “Petroleum” consumption (which includes both oil and NGPL) is 35.603 quads. Our “oil” production is 19.647 quads, our “NGPL” production was 4.567 quads. So comparing oil + NGPL production to petroleum consumption, our production amounted to 68% of petroleum consumption in 2015. If we were to include biofuel production (2.161 quads) and consumption (2.145 quads) in the comparison, it would bring the ratio up to about 70%.

https://ourfiniteworld.com/2017/01/30/the-wind-and-solar-will-save-us-delusion/comment-page-17/#comment-114857 

 

debtor of last resort's picture

Net export, or just export.

hotrod's picture

What happened to PEAK OIL.  So much oil I think I should drill my back yard.  Who knew it was everywhere.  Alaska announces its biggest find ever.   Imagine what Putin is thinking.  20 a barrel gotta be coming. Venezuela might as well fold now.  USA gonna be the oil exporter to the world and pay off this deficit no problem.

debtor of last resort's picture

Look dude, oil is gravity. Way beyond gravity.

francis scott falseflag's picture

Sumpin a lot worse for mankind than $20 a barrel of oil is slouching toward Washington. 

roddy6667's picture

According to the Peak Oilers (not an NFL team) we have been nearly out of oil for 50 years. They sound like those preachers who predict the end of the world and take their flock to the mountain and await Armageddon.

TGDavis's picture

They've been saying that for years. Didn't they just find a trillion barrels in Utah? I know Alaska got a billion barrel boost last week.

Ms No's picture

There is aways a supposedly new huge find that never pans out.  They must be paying 8 million a well for entertainment.  Cheap oil is long gone.  Even Russia admits they have thirty years max.

francis scott falseflag's picture

According to the U.S. Energy Information Administration the US

imported 2,687,409 barrels of crude oil in the year of 2015 and

2,883,117 barrels in 2016.

 

Don't we have to subtract these figures from total US exports to get a

true figure for the total USBS? 

 

Just asking.

 

Anonymous_Beneficiary's picture

I get the feeling this is bearish for metals in general, and PM's in particular.

Pasadena Phil's picture

The only "glut" in the US is due to government policy which continues to impede oil exports. Just last week, there was an article about a crisis developing in NYC harbor due to a "glut" of gasoline and nowhere to store those imports. Okay, and the problem is?????? YES! Stop importing! Start exporting! Can it be made more clearly? Why do we insist on importing when we have a "glut" of cheaper domestic supply????? Doh!!!

Sapere aude's picture

How many times do I need to post and prove 'THERE IS NO OIL GLUT'. Some on here are in my opinion paid shills to keep the media machine going the way some want it to on oil, just as they have done on gold and silver.

There are though some valid points made by some, which is good.

Sinbad2. That's precisely the problem.

All and sundry are given the fodder of how cheap shale is to produce from, but its complete tosh. What makes me smile is they even roll out companies who are on the brink of bankruptcy and have lost billions to tell us profitable it all is!

Peak oil is a proven, unfortunately its the ignorant who quote it without realising what Peak Oil referred to, and at what point in history it was made, and where historically, Peak Oil has been proved to have passed.

If it wasn't can anyone tell me why we are using sour oil, when we never used it all, there was no market for it?

Can any one tell me why we are drilling deep in offshore dangerous locations?

Can anyone tell me why Saudi Arabia and virtually all the super giant fields are subjected to enhanced recovery and multiple methods of recovery and workovers to eek out oil?

Can anyone tell me why we are bothering to utilise Canadian oil sands, the most destructive and cost ineffective oil out there?

Can anyone tell me how its possible to defy the law of physics in shale, where the U.S. authorities really having an agenda against oil because of Russia come out with figures plucked out of the air, and even the small print tells you it is, but its still quoted as fact, then subject to change after the damage is done.

Can anyone tell me why they are working on the Permian now? Because they have used up the sweet spots elsewhere, on the Eagle Ford, the  Bakken, the Monterey and for the record NONE OF THEM CAME NEAR TO THE RESERVES THE EIA ATTRIBUTED TO THEM.

Can anyone do a basic figure where Red Queen Syndrome shows its effect even without compound reductions through legacy but straight comparisons:

I.e. you drill 1000 wells at 1,000bopd, and you get 1,000,000bopd Initial Peak Production....within days that starts to drop off, and by six months you've lost 50% of your production, giving you just 500,000bopd but having to sustain the 1,000 wells, so you need another 500 wells drilled at 6 month period just to keep production at the original peak of 1,000,000bopd.

At the end of the year you have the original 1,000 wells declined by 65% minimum, so the original 1,000,000 from them is now just 350,000bopd, but now you have also got the legacy effect on the 500 six month old wells that were doing 500,000, but are now doing 250,000 so you are down to 600,000bopd after the first year.

So you have to drill another 600 wells to make up the 600,000, but each day the decline rates on these and the other wells mount up...and that is what Red Queen Syndrome is!

There are only finite drilling sites on acreage or pads and the geology only supports a finite number of wells before saturation of wells decreases the output from ANY subsequent wells, and you run out of sweet spots.

Then you have the 1000's of wells after a few years that are nothing more than stripper wells, producing as little as 30BOPD but costing more for the infrastructure and maintenance, but they really need plugging and abandoning as they are not commercial, but then no company wants to admit they only lasted that long, or cough up the $2m per well to properly plug them.

http://www.zerohedge.com/news/2017-03-02/beware-bakken

 

Why on earth would you trust an oil trader to give any advice, as all they want is self fulfilling prophecies to cash in on their short selling

Why do you think the US changed its view on 'global warming' where at first it would have nothing to do with something so provably wrong, and where 'the inconvenient truth' is now looked upon as a comedy, where NONE of the predictions came true.

For example we were going to lose all polar bears as the ice caps melted....INSTEAD we have so many polar bears that being territorial creatures they are having to go further and further afield for territory.

The original climate data was PROVABLY altered, and many of the graphs show they have had truncates axis to try to falsify the extent of any data.

Even NASA got involved in it, and where all the scientist that roll up to tell you, are inevitably those employed in 'global warming' research, so no conflict of interest there!

This is all to wean us of oil that is not going to be available to everyone, there's not even anough now to go round. How do you think Syria and all the other countries racked by war, will be rebuilt, half the world has electricity for less than 4 hours a day, water for the same if at all, and all potentially wanting more oil of a finite resource.

Fukushima shows us we can't rely on nuclear, yet you hear so much now, where diesel is the devil incarnate, even though of course it produces less carbon dioxide pro rata compared with power than petrol.

Scientists and governments know that the bullshit they are peddling on oil gluts, primarily supported by the West, is simply not true and are worried sick, hence the CIA report a few years back about having to be totally hydrocarbon independent as the resources run out! Look it up. They didn't manage it though as its easier to pretend there is a glut, to hit Russian economy and keep the oil price low, and hope no one else realises its all rubbish, oil will not be available in the quantities necessary, and why so many US oil companies are bankrolled at ZIRP, to drill for oil that was never profitable even at $80

Why do you think Tesla got so much subsidy?

If anyone really believes the global warming crew, then they have not done their research properly.

The temperatures on the globe have always changed, before humans were ever on the earth. If not you tell me how in Scotland, evidence exists of prehistoric animals such as big cats (not going to call them sabre toothed tigers as there was no such animal), and wildlife more at home on the plains in Africa.

In the same places finds of woolly mammoths an opposite climatic requirement.

ONE BIG CON, because they are desperate to keep the price of oil down, hence the silly subsidies offered on electric vehicles etc., which will have no effect on the climate at all.

Apparently its all down to oil used in cars.....and if you believe that, then I hope you get a payment from the tooth fairy because that is more believable than the crap spouted by some on global warming and where then real scientists disproving any connection, using real facts are vilified, or where then the climate change grant crew, living of the subsidies, then seek to change the way data is collected or even change the way data figures collected 50 years ago is assesed, as otherwise it doesn't work.

The trouble is that even on this board, some are becoming wise to the fact the Emperor has no clothes.

ponzi shale

 

 

 

roadhazard's picture

Peak Oil as in better pump and sell now before oil is not what drives the world.