One big story of 2011 was the United States switched from being a internet importer to a net exporter of petroleum products. Here are the main points behind that development.
The graph below plots the distinction between U.S. exports and imports of petroleum products. On average in 2008, we had been importing about 1.Eight million barrels per day greater than we exported. So far within the second half of 2011, the distinction has swung to a mean optimistic internet export stability of zero.4 million barrels per day. The exports are coming within the form of diesel and gasoline that’s being offered all over the world, with the top 10 buyers in terms of development of demand for U.S. products being Mexico, Netherlands, Chile, Canada, Spain, Brazil, Guatemala, Turkey, Argentina, and France.
Determine 1. U.S. web exports of petroleum products, common of most recent 12 weeks, in thousands of barrels per day, Jan 5, 2007 to Dec 16, 2011. Information source:
The very first thing to grasp about this number is that it refers only to web exports of refined petroleum products, calculated for instance by subtracting the quantity of gasoline that the U.S. imports from the amount of gasoline that we export. These imports or exports of refined merchandise are far smaller in magnitude than the imports of crude oil, which is the raw materials from which refined merchandise are made. The small optimistic net export balance on petroleum products is still fully dwarfed by the large destructive steadiness on crude petroleum.
Determine 2. Purple line: U.S. web exports of petroleum products, average of most current 12 weeks, in hundreds of barrels per day, Jan 5, 2007 to Dec sixteen, 2011 (similar collection as in Determine 1 above). Blue line: U.S. net exports of crude petroleum, average of most current 12 weeks, in hundreds of barrels per day. Information source:
Nonetheless, something actual is occurring right here. What accounts for the new-found U.S. competitiveness? I think a key factor is that considerable new provides of crude oil from Canada and North Dakota at the moment are coming into the central United States. Between 1987 and 2008, West Texas Intermediate, the benchmark light, sweet crude oil on the market in Cushing, Oklahoma, offered for $1.50/barrel more than Brent, its North Sea counterpart. That differential vanished in 2009-2010, and thus far in 2011, WTI has bought at a median value that astonishingly is sort of $17/barrel cheaper than Brent.
Figure three. U.S. net exports of petroleum products (red line, left axis, in thousands of barrels per day, from Determine 1), and value of Brent minus that of WTI (inexperienced line, right axis, in dollars per barrel, from EIA.
That value differential persists because the U.S. lacks the ample infrastructure to transport the new crude all of the solution to refineries on the U.S. coasts. However, petroleum products transfer in numerous pipelines.
Major U.S. oil, fuel, and product pipelines. Supply: World Factbook.
U.S. oil information are reported when it comes to 5 important areas. One statistic of interest is the circulate of crude petroleum and petroleum products from PADD 2, where WTI is being sold at such a discount, to PADD 3, where refiners are paying Brent costs to import oil by tanker, and from which refined merchandise are sometimes shipped abroad.
U.S. oil reporting regions. Source: EIA.
Here’s what’s been occurring to those flows from PADD 2 to PADD 3. During 2011, an extra four.2 million barrels of crude oil had been transported each month compared with 2009, and an additional 5.1 million barrels per thirty days of petroleum products have been transported.
Black line: monthly shipments of crude petroleum (in 1000’s of barrels monthly) from PADD 2 to PADD three, Jan 2000 to Sep 2011. Inexperienced line: monthly shipments of petroleum products. Knowledge source: EIA.