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OilMonster

Crude Oil September 17, 2019 12:30:38 AM

Buyers of Saudi Oil Scramble for Alternatives, U.S. Exports Ramp Up

Anil
Mathews
OilMonster Author
Booking activity and freight rates for cargoes from the U.S. Gulf Coast rose over the weekend and on Monday, a ship broker said.
Buyers of Saudi Oil Scramble for Alternatives, U.S. Exports Ramp Up

OILMONSTER.COM- The oil markets were in turmoil on Monday after the weekend’s attack on Saudi facilities, as refiners in top consumer Asia looked for alternative supplies, U.S. crude producers ramped up efforts to export crude and Saudi Arabia tried to secure refined products.

Crude prices surged by nearly 20% on Monday, the biggest jump in almost 30 years, after Saturday’s attack cut output at processing facilities at Abqaiq and Khurais by a total 5.7 million barrels per day (bpd), knocking out half the kingdom’s production.

There was no indication on when output will be resumed by the world’s largest oil exporter, but two sources briefed on state-owned Saudi Aramco’s operations said a full return to normal production “may take months.”

While most countries have ample storage to meet immediate needs, companies are already planning for shipments for weeks and months into the future to make up for a shortfall in light crude and refined products, market participants said.

The lost Saudi crude oil output represents about 5% of global crude supply. Analysts from research consultancy Bernstein said Saudi oil exports are mostly geared towards China, which takes about 1.7 million bpd, or nearly 25% of Saudi exports.

Booking activity and freight rates for cargoes from the U.S. Gulf Coast rose over the weekend and on Monday, a ship broker said. U.S. physical crude along the Gulf Coast, which can be exported most easily, was in high demand, with premiums soaring to levels not seen since June for certain grades.

“The export window for U.S. crude is going to be wide open,” said Phil Flynn, an analyst at Price Futures Group in Chicago. “You are probably going to see record amounts of U.S. exports.

” Booming shale production already allowed the United States to close in on and briefly overtake Saudi Arabia as the world’s top exporter of oil and refined products in June, after U.S. crude exports surpassed 3 million bpd, the International Energy Agency (IEA) said last week.

Courtesy: www.reuters.com

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