Despite the continued challenge to export economics posed by the narrow Brent-WTI spread, U.S. crude oil loadings rose to 3.9 MMb/d last week, up 434 Mb/d from the previous week and only 13 Mb/d shy of year-to-date (YTD) levels. The four-week moving average (dashed red line in below chart) now stands at 3.8 MMb/d, just slightly below the 3.9 MMb/d YTD average. Exports from the U.S. Gulf Coast increased across all areas except Houston, which remained relatively flat week on week.
Last week, exports from the U.S. Gulf Coast to Europe totaled 15.1 MMbbl, an increase of 1.9 MMbbl from the prior week. Approximately 4.8 MMbbl were loaded without a declared destination, so we expect these volumes to be revised upward in the coming weeks. Notably, shipments to Spain surged to 2.4 MMbbl, up from zero the prior week, and exports to Norway reached 1.9 MMbbl, marking the end of a five-week hiatus.
Meanwhile, exports to Asia continued their lackluster performance, falling to 4 MMbbl, a decline of 3.8 MMbbl week on week and well below the year-to-date weekly average of 10.5 MMbbl. The main driver is reduced refining demand amid an economic slowdown across the region. Additionally, with the Trans Mountain Expansion (TMX) coming online earlier this year, more Canadian oil is now being exported from Vancouver’s Westridge terminal, displacing some of the Canadian supply that previously flowed south to the U.S. Gulf Coast for export, particularly to China. Despite this, the VLCC Kassab departed for China last week, the first vessel in a month.
