Record US oil exports wrest shares from Russia, OPEC

FE Team | Published: May 28, 2018 21:23:12

SINGAPORE, May 28 (Agencies): Record crude oil volumes exported from the United States will be heading to Asia in the next couple of months to take another piece of the market away from Russia and producers in the Organisation of the Petroleum Exporting Countries (OPEC).
The United States is set to export 2.3 million barrels per day (bpd) in June, of which 1.3 million bpd will head to Asia, estimated a senior executive with a key U.S. oil exporters.
Data from the Energy Information Administration shows U.S. oil exports peaked at 2.6 million bpd two weeks ago.
The record outbound volumes come as U.S. crude production hit all-time highs, depressing U.S. prices to discounts of more than $9 a barrel below Brent crude futures on Monday, the widest in more than three years and opening an arbitrage for excess supplies to other markets.
The difference in the key benchmarks was a chance for Asian refiners to reduce light crude imports from the Middle East and Russia after Brent and Gulf prices touched multi-year highs, traders in Asia said.
"We're diversifying a lot to other regions. If Saudi Aramco still doesn't reduce prices next month and ADNOC (Abu Dhabi National Oil Company) follows, we will increase our U.S. crude purchases," a Southeast Asian oil buyer said.
Meanwhile, energy firms plunged with oil prices in Asia Monday after Saudi Arabia and Russia signalled they could lift output, while indications Donald Trump's summit with Kim Jong Un could be back on provided support to equity markets.
Both main contracts tanked on Friday after Saudi oil minister Khaled al-Faleh said his country could open the taps wider in the second half of the year to insure against any supply shocks.
His Russian counterpart Alexander Novak said they had spoken about a two-year-old deal capping production, adding OPEC and other members of the pact would discuss lifting limits next month.