Wood Mackenzie analysts expect US exports of refined products to increase based in part on the outlook for US tight oil supplies, a WoodMac spokesman told the American Fuel & Petrochemical Manufacturers annual meeting Mar. 13 in San Diego.
Alan Gelder, head of WoodMac oils research from London, told an AFPM technical session on strategic issues that US refined products moved to a net surplus during 2011 after decades of the US being a net importer.
“The position of the US as a net exporter of oil products has arisen during a time in which demand has dropped by almost 1.9 million b/d from its peak in 2005 with 2011 demand being approximately 150,000 b/d below 2010 levels,” Gelder said.
Strong supply growth from US unconventional oil plays support the sustainability of the US continuing as an exporter of oil products, he said, adding that light, sweet crude produced in US shale plays and transported to the Gulf Coast displaces Nigerian crude oil imports.
WoodMac forecast a sustained gradual decline for US gasoline demand due to a weakened growth of gross domestic product, slowing growth in vehicle miles traveled, legislation for fuel-efficiency, and an increasing share of renewable energy sources in the nation’s transportation fuel mix.
This declining demand growth supports increased exports, all other things being equal. WoodMac noted uncertainty could change this outlook, citing potential economic turmoil caused by a European banking collapse, for example. Other confounding factors could be increasingly complex political issues, including regulatory hurdles to the development of pipelines to transport unconventional oil from producing areas to refining areas.
Gelder said WoodMac’s forecast is based on the expectation that US GDP will grow slowly over the medium term along with the rest of the world.
Another reason US exports could grow is that European refining capacity is dwindling with an estimated 1.3 million b/d of capacity at risk of permanent closure, Gelder said. Some European capacity was shutdown last year and even more capacity is nonoperational.
Latin America currently is a market for US exports. “Post-2015, however, the development of facilities such as Brazil’s export refineries, are likely to result in Latin America becoming a stronger competitor to the US Gulf Coast refineries in global markets,” Gelder said. “This shift in Latin American balances suggests that US export refiners need to consider their options to secure volume offtake over the coming years.”
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