U.S. light oil exports double in May, mostly to Europe

Jun 29, 2015 12:00 AM

U.S. exports of ultra-light crude, also known as condensate, have doubled since the start of the year, with most shipments headed to Europe, according to traders familiar with the deals and data from an energy consultant.

The United States exported between 120,000 and 140,000 barrels per day (bpd) of condensate last month, according to traders and ClipperData, which tracks ships and terminal loadings, up from about 60,000 bpd at the start of the year.

The condensate is lightly processed through stabilizers due to rules banning crude exports in the United States, now the world's third-largest oil producer.

The rise comes as more companies look to take advantage of the ability to ship the oil overseas, including to places like the Netherlands, France, South Korea and Brazil.

"One of the main surprises is that the majority of the exports have been to Europe rather than anywhere else, when we thought the concentration would be to Asian markets," said Abudi Zein, chief operating officer at ClipperData, adding this was probably to do with the size of the cargoes and freight costs.

Traders have also said that the oil's quality deterred some Asian refiners.

Enterprise Products Partners led the pack with 1.8 million barrels of exports per month, or 60,000 bpd. It sold a year's supply to Mitsubishi Corp and Vitol at the start of this year.

BHP Billiton has been selling a 700,000-barrel cargo every month, though has delayed a plan to double exports to two cargoes a month due to production issues, traders said.

BP started exports in February and also shipped out a cargo in April, said a trader who tracks the movement of U.S. condensate. It had another cargo due to load at the end of June which will head to Europe.

Meanwhile, in the first condensate shipment to Latin America, some 636,000 barrels reached Petrobras' San Sebastiao dock in May, according to data from ClipperData and trading sources.

The oil exported by Enterprise, BHP and BP is of a heavier grade with API gravity at 52-54 degrees, which goes to Europe, traders said. API gravity is an indicator of the crude's density and hence its quality.

Asian refiners prefer lighter grades of API with a gravity of 61 degrees containing more petrochemical feedstock. This grade is exported by Royal Dutch Shell, Plains All American LP and Trafigura.

Company                  Monthly export programs ('000 bbls)

BHP                                  700

Enterprise                        1800

Plains All American             300

Shell                              300-500

BP*                               300-500

*exports one cargo every alternate month

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