Crude Ban Too Late To Reverse Fortunes in the Oil Patch?
As the New Year approaches, Enterprise Products Partners isn’t wasting any time.
The Houston-based pipeline giant announced in a Dec. 23 statement it would load its first cargo of U.S. crude oil for export during the first week of January – less than a month after the ban was lifted.
“We are excited to announce our first contract to export U.S. crude oil, which to our knowledge may be the first export cargo of U.S. crude oil from the Gulf Coast in almost 40 years,” said A.J. “Jim” Teague, chief operating officer of Enterprise’s general partner, in a news statement. “Enterprise’s integrated system enabled us to quickly respond to customer demand for U.S. crude oil by international markets.”
Lifting the ban will facilitate economic growth and job creation in the United States, as well as enhance national and energy security, he said.
“This action provides new markets to domestic producers, especially producers of light crude oil, and will provide global markets with supply diversification,” Teague added.
Enterprise’s cargo of roughly 600,000 barrels of crude oil belongs to oil trader Vitol, according a Reuters report.
Producers such as ConocoPhillips and Continental Resources Inc. had long been vocal in their support for lifting the 40-year-old ban, a relic of U.S. reaction to the Arab embargo in 1973.
But not everyone wanted to see the ban lifted. Domestic refiners especially have lobbied against the change. And, some analysts say it’s too little too late. More than a week after the ban was reversed, oil prices still hover in the mid-$30s per barrel.
“It looks like the lifting of crude oil export restrictions came too late to have much impact on U.S. production or prices in an era of free falling prices,” RBN Energy LLC analyst Sandy Fielden wrote in a Dec. 27 report.
Fielden notes the United States has such a surplus – not because the refining capacity doesn’t exist – but because most of the nation’s refineries aren’t built to support the light, sweet crude that comes from shale basins. As such, the glut that occurred has weighed on the market and kept U.S. prices lower than overseas equivalent grades, he said.
“In normal circumstances, this imbalance of crude quality would have worked itself out in the international marketplace by U.S. producers selling shale crude to refineries overseas that could process lighter crudes and [the United States] continuing to import the heavier crudes [refineries] preferred,” Fielden said.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- The Rigzone Interview: Private Equity Cash Focuses on Oil, Gas Development
- Could Argentinian Politics Beat the Vaca Muerta?
- The Rigzone Interview: Oil, Gas Goes Digital for Safety, Speed
- Deal Of The Month: EQT, Rice Energy Merge in Mega Marcellus $6.7B Gas Deal
- OpEd: OPEC Production Cuts Fail, Markets Pay for Underestimating US Shale
- ExxonMobil Racks Up Discoveries in Guyana Block Eyed by Chevron
- Oil Market Sentiment Has Improved Significantly
- EU, US Eye Collaboration on Nuclear Materials
- USA Driving Activity to Increase to All-Time Highs
- TC Energy to Sell Prince Rupert Gas Pipeline Project to First Nation
- EU Electricity Export to Ukraine Up 94 Percent in Two Years
- China Coal Output Falls for First Time since Government Ordered More
- BP Pulse Buys One of Europe's Largest Truck Stops
- UK CCUS Plans Outdated: Think Tank
- North America Enters Rig Loss Streak
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- Rystad Looks at the Buzz Around White Hydrogen
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension