Oil exports from the United States will continue to rise in the coming months, most market participants say, two days after the government announced a record US oil supply. Over the last three weeks, oil exports rose from 143K to 1.98m barrels per day. At this level, the United States, exports more oil from two of the largest producer countries in the world - Venezuela and Nigeria.
Increasing US exports also contribute to the widening spread between WTI and Brent. Currently it is $6.25. WTI is currently trading at $ 50.70 and Brent $56.95.
The levels of US exports, according to most analysts, are unstable, but in the next few months they are expected to remain at high levels as the country performs many foreign transactions. Historically, the widened spread between WTI and Brent leads to a rising US oil export, which in turn will fuel the next downward impulse.
While the spread between the two varieties remains so high, we can expect the net US exports to remain at levels above 1 billion barrels per day, which will lead to serious fluctuations in the price of black gold. On the chart below, we can track the net exports of the United States over the past 16 years:
In the short term, the good news for oil is that shale deposits will close for seasonal maintenance, leaving the US's net exports to drop, and hence the price of oil rises and shrinks the spread between WTI and Brent.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov
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