U.S. oil exports signal solid world liquids demand past shoulder season
April 26, 2024
Key Observations:
U.S. petroleum exports have surpassed 12 million b/d for the first time. EIA data published two days ago for the week ending Apr 19 show U.S. crude exports at 5.179 million b/d and U.S. oil product exports at 6.915 million b/d. These figures are 732 thousand b/d and 530 thousand b/d above trend, respectively, by our calculations.
Trend itself is up smartly from a year ago: now 10.8 million b/d (+731 thousand b/d, +7.2% YoY).
To put these liquids trade flows in context, Europe produces 4.0 million b/d and consumes 14.2 million b/d, with 94% of that demand in OECD Europe (13.4 million b/d). U.S. crude exports alone are larger than the crude output of any OPEC country, except for Saudi Arabia (9.1 million b/d).
The April pickup in U.S. oil exports should counter some of the unease about the trade drag on 1Q2024 U.S. GDP reported yesterday. At current prices, last week's U.S. petroleum export activity may alternatively be thought of as more than half a trillion dollars of annualized economic value.
At the same time, oil price risks working through this channel are also increasing. The global economy's growing reliance on this conveyor belt to deliver liquids supply from U.S. producers to world consumers creates the potential for sudden bottlenecking if pace were to slow or stumble.
Benefits: STNG, OKE, PAA, MPC, VLO, PSX.
Source: EIA, Blacklight Research. Note: for further reading, see The Conveyor Belt Buckles (10-May-2023) and A Barrel in Hand is Worth Two in the Balance (19-Mar-2023).
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