US easing of light crude export ban to put pressure on Asian producers

SINGAPORE, Dec 31 (Reuters): Formal US government approval to ease a 40-year-old ban on exports of crude oil will squeeze Asian producers already scrambling to cut costs amid diminished revenues due to a crash in energy prices and weaker currencies.
The Obama administration on Tuesday bowed to months of pressure over the ban on exports of most domestic crude, taking steps expected to unleash a wave of ultra-light shale oil known as condensate onto global markets.
And while earlier shipments of North American condensate stalled after initial buying interest from Japan and South Korea, the addition of supplies as demand cools is likely to trigger more aggressive discounting by producers trying to defend market share in Asia, the world's biggest net oil buyer.
Traders said that most US ultra-light oil supplies would end up in Europe, as a rise in freight costs has made long-distance shipments to Asia uncompetitive. Still, they said, the addition of US oil supplies would ripple through the markets.
"If the US can undercut West Africans in Europe, then that may force Nigeria and Angola to try and offer their supplies to Asia. And in between all that you have the Middle East suppliers offering steep discounts to everybody," one oil trader said.