Ruling Could Help US Become Major Oil Exporter
Even large-scale exports of these condensates are expected to have little or no effect on fuel prices for U.S. consumers. Condensates aren't a major component of most fuel production, and prices for U.S. fuels are subject to global market forces because they can be exported freely.
"It's not credible to say that if we export more condensates that would cause a spike in prices at the pump," said Citi commodity strategist Eric Lee.
The American Petroleum Institute, a lobbying group that represents oil companies, said the rulings do not change its contention that the restrictions on crude exports should be lifted.
"It certainly doesn't address the major issue," said Kyle Isakower, vice president for regulatory and economic policy at API. "We still have this mismatch of crudes in the U.S., a glut of light sweet crude and no refining capacity to take it."
The rulings do affect one glut, however. The price of condensate is cheaper than global crude by $10 to $30 a barrel because so much of it is being produced by U.S. drillers working in shale formations, particularly in South Texas, and it has had nowhere to go — until now.
"These products need a home," said Enterprise Products Partners spokesman Rick Rainey.
Josh Lederman contributed to this story from Washington. Cappiello reported from Washington.
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