U.S. Refiners Open Export Spigot to Meet Latin American Need
U.S. refiners exported record amounts of oil products last week, taking market share from struggling competitors in Mexico and the Caribbean.
Almost 4 million barrels a day of gasoline, distillates like diesel and heating oil, and propane left the country as refiners in Texas and Louisiana processed the most crude in at least 24 years. Demand has grown this year as competitors in Latin America sputtered out with maintenance issues, Andy Lipow, president of Lipow Oil Associates LLC, said by phone from Houston.
“The high exports are due to the poor refinery operations that we’re seeing in Mexico and Venezuela, creating a demand for record amount of exports off the Gulf Coast,” Lipow said.
Combined gasoline and distillate exports surpassed 2.5 million barrels a day last week, the most in government data dating back to 2010. Gasoline exports, which have more than doubled since August, have topped 1 million barrels a day three times in the past two months. The Energy Information Administration began providing weekly export figures based on real-time data in August.
The rising foreign demand has helped tighten the domestic market. January gasoline futures on the New York Mercantile Exchange have flipped to a premium versus February, indicating a prompt demand surge that will continue to coax refiners to make more fuels. Both the January Nymex gasoline and diesel futures contracts settled at highs unseen since 2015 on Thursday as they closed at $1.682 and $1.7037 a gallon, respectively.
Written by Laura Blewitt