U.S. June crude oil exports highest since 1957, passing Ecuador

Wed Aug 6, 2014 7:07pm EDT

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By Catherine Ngai
    NEW YORK, Aug 6 (Reuters) - Exports of crude oil from U.S.
shores jumped in June to the highest since the 1950s, according
to U.S. data, topping OPEC member Ecuador in supplying global
markets and underscoring the dramatic shift in global flows.
    Exports jumped 35 percent from May to 389,000 barrels per
day in June, almost all of that sent to Canada, according to
data from the U.S. Census Bureau released on Wednesday. That's
more than Ecuador, the smallest producer in the Organization of
the Petroleum Exporting Countries with overseas sales of some
354,000 bpd in 2012, according to government data.
    The June surge of more than 100,000 bpd is the biggest
monthly rise since the onset of the U.S. shale oil revolution,
which has unlocked billions of barrels of reserves and fueled a
production boom that has the potential to exceed domestic
demand.
    The rise shows that U.S. crude from places such as North
Dakota and Texas is finding more buyers in Canada, particularly
on the Atlantic Coast where refiners are still dependent on
costlier Brent-linked crude from the North Sea or West Africa.
    Although a decades-old U.S. law generally bars exports of
domestically produced crude, shipments to Canada are broadly
allowed, as are re-exports of foreign oil.
    But a growing excess of particularly light crude is
prompting companies to find ways around the ban, including by
lightly processing a super-light form of oil known as condensate
in order to get around restrictions on raw crude. The first such
cargo sailed from Texas bound for east Asia in late July
.
    The rise in exports may level out soon due to congestion on
U.S. railway lines that now handle a tenth of U.S. oil
production, according to Dr. Philip K. Verleger, Jr., president
of consultancy PKVerleger LLC. Some of North Dakota's Bakken oil
is sent by rail thousands of miles to the Canadian east coast.
    "Export figures will probably slow down in the fall because
the railroads are going to run into a capacity problem," he
said. "When the fall comes, agriculture (shipments) will get
priority and the pressure is on for the railroads to move ag and
sidetrack oil. Suddenly, exports will plateau."
    
    SINGAPORE AND SWITZERLAND TOO
    The Customs data showed 6,000 bpd went to Singapore and
5,000 bpd to Switzerland. These cargoes were likely re-exports,
probably of Canadian oil, market sources say. Small-scale
exports to Switzerland first emerged in April. The shipments to
Singapore, classified as under 25 degrees API, also known as
heavy crude, appeared to be the first on record.
    June is the first month that exports have leapfrogged above
their previous recent peak in the 1970s. They hit their highest
since April 1957, in the aftermath of the Suez Crisis when the
nationalization of the canal caused the United States to
increase crude shipments to Europe. 
    Despite the June increase, the United States remains a large
net importer of crude, buying some 7.5 million bpd over the past
week. Many refiners are geared to run heavier, sour crudes from
abroad, while others lack easy access to shale oil.
    Exports under the exemptions need to be approved by the
Commerce Department's Bureau of Industry and Security.
    The Census data is published weeks earlier than closely
watched Energy Information Administration (EIA) trade figures,
which are based in large part on the Census. Since 2012, the
monthly Customs figures are identical to the EIA's data with the
exception of four months, according to a Reuters analysis. The
EIA could not immediately comment on the discrepancies.
    Export data from the Census Bureau is gathered
electronically where exporters are required to fill out
declaration forms when cargo worth more than $2,500 in value
leaves U.S. shores, a spokeswoman said. It combines both
domestically-produced and re-exported crude oil.
    The EIA's export data also includes re-exported oil.
However, it was not immediately clear how the EIA defines crude
oil in its monthly export data, which could be a reason for the
slight variation. 
    
 barrels per day      June 2014*        May 2014**
 Canada                        378,000          263,000
 Singapore                       6,000                0
 Switzerland                     5,000            8,000
 Spain                               0           17,000
 TOTAL                         389,000          288,000
 * Indicates Census Bureau data
** Indicates U.S. Energy Information Administration

 (Reporting By Catherine Ngai; Editing by David Gregorio)
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