Weekly US crude exports fall on week, four-week moving-average supported

Houston — Weekly US crude exports fell over the week ended on April 9, however, despite the week-on-week fall, the four-week moving-average for US crude exports rose to its highest level since the period ended Feb. 19, according to the US Energy Information Administration.

US crude exports over the week ended on April 9 averaged 2.579 million b/d, down 855,000 b/d from the week before, according to EIA data.

While US crude export flows were down on a week-on-week basis, the four-week moving average for US crude exports rose 15,000 b/d on the week to 2.917 million b/d, EIA data showed.

Of the cargoes exported last week was a rare crude export from United Riverhead Storage in Long Island, New York. On April 7, the Aframax vessel, Indigo Sun, loaded a cargo of Eastern Canada's Hibernia crude and is destined for Tranmere, United Kingdom, for late April arrival, according to data from Kpler, a data intelligence company.

The last cargo of Hibernia to be exported from the US East Coast was on February 17, when the Aframax Sfl Sabine loaded a cargo of the grade from International-Matex Tank Terminal in Bayonne, New Jersey that was delivered to Singapore, Kpler data showed.

Hibernia crude is produced off the coast of Eastern Canada and has an API gravity around 34 degrees, and a sulfur content of around .48%, according to S&P Global Platts data. The grade was last heard offered at a 60 cents/b discount to Dated Brent for late May, early June loading on an FOB basis.

While appearing closed to Northeast Asia, the arbitrage incentive for WTI MEH crude into Northwest Europe began to open at the end of March and has remained open at the start of April, according to the Platts Crude Arbflow calculator. The arbitrage incentive for WTI MEH crude into Rotterdam against local Forties has averaged 13 cents/b through the first 13 days in April, up from an average of minus 36 cents/b in March, and minus 56 cents/b in February, according to Platts Crude Arbflow.

However, while sources in Europe have noted flows of US crude, particularly WTI are expected to be around 1 million b/d through April and May, flows are expected to drop off in June as US refinery runs recover.

Indeed, refinery runs both nationally and in the USGC rose to their highest levels over the week ended April 9 since March 2020, according to EIA data. Nationally, refinery runs increased to 15.051 million b/d, the most since the week ended March 20, 2020, while on the USGC, refinery runs rose to 8.292 million b/d, the most since the week ended March 27, 2020.

Platts Analytics expects US refinery runs to be 1 million b/d higher in 2021 year-on-year, while production is expected to be 430,000 b/d lower year-on-year. This disparity, while expected to be offset some by stronger imports from both Canada and overseas, is slated to draw down US crude inventories which ballooned in 2020, according to Platts Analytics. Looking forward, Platts Analytics expects US crude exports to decline slightly in 2021 from the year prior before rebounding in 2022 amid recovering Permian production.