Crude oil trading dynamics in West Texas and along the Texas Gulf Coast have experienced a whirlwind of change. Permian production was skyrocketing in 2018, but has now started to slow. It seemed for a time that crude takeaway pipeline capacity wouldn’t get built fast enough; now it looks like we’ll have far too much too soon. And along the coast, the once-overlooked Port of Corpus Christi is quickly becoming the epicenter of export activity, overtaking Houston, Beaumont and Louisiana — sometimes all three combined — for most volume moved on a monthly basis. With new export terminals coming online and increased connectivity, Corpus appears poised to continue its recent string of record-setting export numbers. In today’s blog, we review some recent breakthroughs in Corpus cargoes and shine a light on the new terminals in the area.
Corpus Christi exports are increasing at a rapid rate. From January through August of 2019, Corpus volumes averaged just 532 Mb/d on a monthly basis, according to ship-tracking data from RBN’s Crude Voyager report. Since September, however, that monthly average has skyrocketed to 1.24 MMb/d. And in the past four weeks, export volumes out of the port have been 1.6 MMb/d, 1.536 MMb/d, 1.65 Mb/d and — for the week ending December 27 — 1.257 MMb/d, for an average of ~1.5 MMb/d (top of the right-most bar stack in Figure 1). Those numbers are truly astonishing, and at times, Corpus volumes have accounted for more than half of all crude exports moving out of the U.S. on a weekly basis. It’s even more impressive that Corpus has recently taken over the top spot from both Houston and Beaumont. In 2018 and the first half of 2019, Corpus had been a consistent third wheel to those two, with Houston averaging just over 1 Mb/d since the beginning of 2019, and Beaumont averaging 661 Mb/d since the start of the year. Corpus’s rapid growth hasn’t caught the market by surprise, but it has been an interesting case study in how quickly infrastructure development and operational efficiency can change the tide in oil markets. (The port’s exporting prowess also reinforces our view — stated in our 2020 prognostications blog yesterday — that crude export capacity along the Gulf Coast will not be a problem.)
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