US companies will export about 2.3 million barrels per day of oil next month and over half of that (1.3 million bpd) will find their way to Asian markets, Reuters said, citing a key executive with an US oil exporter. This follows a record 2.6 million bpd of oil that the U.S. exported just two weeks ago.
Increased oil exports into Asia come as the price differential between global oil benchmark Brent crude and US benchmark NYMEX-traded West Texas Intermediate widens. That price differential is currently around $9 per barrel, offering arbitrage opportunities for producers and huge savings for Asian refiners which buy US crude oil.
Moreover, the discount between the price of Brent crude and WTI produced in the Permian Basin widened to nearly $11 per barrel in April, marking the largest monthly spread in almost four years. In April, Brent futures sold for an average $72 per barrel, while Permian crude sold for just $61 a barrel.
As long as price differentials remain, US oil exports will continue to chip away at both Saudi and Russian market share in Asia, the world's largest oil consuming region, led by China, Japan, India, and South Korea. China surpassed the US in annual gross crude oil imports in 2017, importing 8.4 million bpd compared with 7.9 million bpd for the US, according to a report by the US Energy Information Administration.
Overnight, the gold price was fixed at $1301.10.
The WTI crude oil price was slightly down overnight at $66.97 per barrel.
In softer commodities, cocoa decreased $75 per tonne or 2.97% to $2454/t yesterday from the $2529 in the previous trading session, tradingeconomics.com reported. Historically, cocoa reached an all-time high of $4361.58/t in July of 1977 and a record low of $211/t in July of 1965.
Coffee increased 3.40c per pound or 2.83% to 123.70c/lb yesterday from 120.30c/lb in the previous trading session, tradingeconomics.com reported. Historically, coffee reached an all-time high of 339.86c/lb in April of 1977 and a record low of 42.50c/lb in October of 2001.