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Current Projections See U.S. On Track For 2020 Petroleum Trade Surplus

No matter which data aggregator you have come to rely on, most currently point to the U.S. having spent key months in the 2019 trading cycle exporting more oil than it imported. Its something that has not been seen since the 1940s.

High mark of the past 12 months was September, a month in which U.S. exports of crude oil and refined products exceeded imports by 89,000 barrels per day (bpd), according to the Energy Information Administration (EIA), compared to the previous September.

Much of this was driven by the light sweet crude proceeds of the shale revolution. To put things into perspective, the EIA’s archival data points to American imports exceeding exports by 12 million bpd less than a decade ago, albeit at time when there was a ban on U.S. exports of crude oil. This was subsequently lifted by President Barack Obama in December 2015.

Remarkably even in 2015, in the wake of the lifting of the 40-year ban by Obama, few thought the situation would alter dramatically. Yet a mere four years later, U.S. imports, especially of light crude from OPEC producers and elsewhere have continued to slide.

For instance, U.S. imports of Nigeria’s Bonny Light, are down by 90% using some metrics, and slid to net zero in July. Not only that, U.S. exports of crude, again comprising of primarily light sweet crude, have at times averaged well above 3 million bpd.

Noting such trends, the International Energy Agency (IEA) forecasts the U.S. to become a sustained net oil exporter in either late 2020 or early 2021. The think-tank’s projections point to an increase in U.S. exports of crude and refined products from 550,000 bpd in October 2019 to average 750,000 bpd in 2020.

Market doubts persist over whether the shale industry momentum can be sustained stateside, including issues related to servicing debt and attracting fresh investment. But price supportive action by OPEC and incremental interest from oil majors in viable shale plays suggests it is not all doom and gloom that some market commentators are predicting.

And it is worth pointing out the U.S. still imports large volumes of crude oil, especially heavy sour crude, given its refining complex, from exporters such as Brazil, Canada and Saudi Arabia to name a few. Nonetheless, the tectonic plates of the U.S. petroleum trade are shifting.

In 2018, the country’s petroleum trade deficit stood at $62 billion, or 10% of Washington’s trade balance, according to Rystad Energy. The Norway-based research and consulting outfit believes not only will a deficit this large be wiped out in 2020, but that a surplus could be achieved as early as February or March, and Washington could become “energy independent on a monthly basis” going forward.

If proven by the industry and survey data, that would be a remarkable reversal for a country which is currently the world’s largest crude consumer, and one that has been in a petroleum trade deficit since 1949.
Source: Forbes

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