One large story of 2011 was the United States switched from being a web importer to a web exporter of petroleum products. Here are the small print behind that growth.
The graph beneath 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. Thus far in the second half of 2011, the difference has swung to a median optimistic internet export stability of zero.Four million barrels per day. The exports are coming in the form of diesel and gasoline that’s being sold everywhere in the world, with the highest 10 buyers by way of development of demand for U.S. merchandise being Mexico, Netherlands, Chile, Canada, Spain, Brazil, Guatemala, Turkey, Argentina, and France.
Figure 1. U.S. internet exports of petroleum products, average of most latest 12 weeks, in hundreds of barrels per day, Jan 5, 2007 to Dec 16, 2011. Information source:
The very first thing to know about this quantity is that it refers only to internet exports of refined petroleum products, calculated for example by subtracting the amount of gasoline that the U.S. imports from the quantity 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 material from which refined products are made. The small positive net export balance on petroleum products is still fully dwarfed by the huge adverse steadiness on crude petroleum.
Determine 2. Crimson line: U.S. web exports of petroleum products, average of most current 12 weeks, in 1000’s of barrels per day, Jan 5, 2007 to Dec sixteen, 2011 (same sequence as in Determine 1 above). Blue line: U.S. web exports of crude petroleum, average of most recent 12 weeks, in 1000’s of barrels per day. Information source:
Nevertheless, one thing actual is happening here. What accounts for the brand new-found U.S. competitiveness? I feel a key issue 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, candy crude oil for sale in Cushing, Oklahoma, offered for $1.50/barrel more than Brent, its North Sea counterpart. That differential vanished in 2009-2010, and up to now in 2011, WTI has sold at a mean worth that astonishingly is sort of $17/barrel cheaper than Brent.
Figure 3. U.S. web exports of petroleum products (purple line, left axis, in hundreds of barrels per day, from Figure 1), and price of Brent minus that of WTI (inexperienced line, proper axis, in dollars per barrel, from EIA.
That value differential persists as a result of the U.S. lacks the sufficient infrastructure to transport the new crude all of the approach to refineries on the U.S. coasts. Nevertheless, petroleum products move in several pipelines.
Major U.S. oil, fuel, and product pipelines. Source: World Factbook.
U.S. oil data are reported in terms of 5 fundamental regions. One statistic of curiosity is the movement of crude petroleum and petroleum products from PADD 2, the place 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 often shipped abroad.
U.S. oil reporting areas. Source: EIA.
Here’s what’s been happening to these flows from PADD 2 to PADD three. During 2011, an extra 4.2 million barrels of crude oil have been transported each month compared with 2009, and an additional 5.1 million barrels monthly of petroleum products had been transported.
Black line: monthly shipments of crude petroleum (in 1000’s of barrels per thirty days) from PADD 2 to PADD 3, Jan 2000 to Sep 2011. Green line: monthly shipments of petroleum products. Knowledge source: EIA.