Washington — US crude oil exports will average 3.6 million b/d in 2020, a growth of 650,000 b/d from 2019 but 300,000 b/d lower than previously expected on slower production growth and as Gulf Coast refiners use more domestic, light, sweet grades, according to the latest outlook from S&P Global Platts Analytics.
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Warm winter weather and weaker global demand have resulted in less dramatic discounting of heavy, sour crudes than originally expected, according to Platts Analytics. This has reduced the expectations for US Gulf Coast refineries to max out coking units and import more heavy crude, which would have displaced US light, sweet crude.
Platts Analytics' team lead of North American oil analytics Jenna Delaney said lower expectations for refinery slate-switching led to the 300,000 b/d drop in projected US crude exports for 2020.
Platts Analytics expects US crude exports to rise another 500,000 b/d next year to average 4.1 million b/d.
Director of oil research for Morningstar Commodities, Sandy Fielden, said he expects all new US production to be exported this year, or about 1 million b/d for total US crude exports of 4 million b/d.
The US exported an average of 2.9 million b/d in 2019, up 45% from 2018, according to year-end data released Wednesday by the US Census Bureau.
Platts Analytics expects pipeline and export capacity to be sufficient to handle additional Permian production this year after midstream companies added more than 2 million b/d of capacity last year.
Ports are still being expanded to move more crude exports, more quickly, with several deepwater terminals proposing to directly load VLCCs supertankers.
Four of the projects have filed federal applications: Trafigura's Texas Gulf Terminal and Phillips 66's Bluewater Texas Terminal off Corpus Christi; Enterprise's Sea Port Oil Terminal off Houston; and Sentinel Midstream's Texas GulfLink off Freeport. They estimate starting service in 2021 or 2022, although not all are expected to be built. Enbridge withdrew its Texas COLT proposal off Freeport to focus on jointly developing SPOT with Enterprise.
The Louisiana Offshore Oil Port is the only Gulf of Mexico port able to load VLCCs fully without lightering from smaller vessels. It started exporting crude in February 2018.
Platts Analytics expects year-on-year US shale growth to fall to 800,000 b/d in 2020, from 1.2 million b/d in 2019.
The US Energy Information Administration will update its forecast for US oil production growth later Tuesday in the Short-Term Energy Outlook.
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