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Petroleum product exports on the up

Hydrocarbon Engineering,

Over the last 10 years, domestic US refinery output of petroleum products has increased significantly while consumption has fallen. This has resulted in a major increase in product exports. Petroleum product exports averaged 4.1 million bpd in first four months of this year, an increase of 0.5 million bpd over exports for the same time in 2014. Product imports are also higher than 2014, but to a lesser extent, leading to an increase in net petroleum product exports.

Import and export regions

Import and export patterns vary by region, with most exports leaving from the Gulf Coast (PADD 3), and imports coming to the East Coast (PADD 1). Record high refinery runs and increased global demand for petroleum products from the US continue to push exports higher.

Over half of the US’s refinery capacity is located in PADD 3, and approximately 75% of US product exports are sent from the region. Through April, PADD 3 petroleum product exports were up 444 000 bpd compared with the same time in 2014. Gasoline, distillate and jet fuel exports combined accounted for 40% of the increase. Higher levels of gasoline and distillate exports were sent to countries in the Western Hemisphere, while gasoline exports to Africa dropped slightly. Jet fuel exports have mainly increased to Western Europe, Central America, and South America, and to a lesser extent Africa. Propane and naphtha exports are both over 150 000 bpd higher than in 2014, and are mainly sent to Asia.

Imports of petroleum products remain an important source of supply on the East Coast, supplementing in region refinery production and receipts from PADD 3 and, to a lesser extent, from PADD 2. US motor gasoline product supplied has been 71 000 bpd higher so far this year than last year, and imports of total motor gasoline have risen by 103 000 bpd.

Product markets

On the US West Coast petroleum product markets are traditionally tightly balanced, with in region refinery production nearly evenly matched to demand. The West Coast is rather isolated from the rest of the country’s petroleum markets because there are no pipelines that cross the Rocky Mountains. However, recently, the region’s supply of distillate fuel has exceeded demand and, as a result, exports have increased. West Coast distillate exports have averaged 117 000 bpd this year so far, in line with the previous two years and 37 000 bpd higher than in 2012. During times of supply disruptions, imports to the West Coast often increase to replace lost supply from in region refineries, as has been the case so far this year. Following an outage caused by an explosion and fire at ExxonMobil’s Torrance, California, refinery in mid February, gasoline imports to the West Coast rose, and have averaged 37 000 bpd this year so far, over double compared with the same time last year.

The future

The future of US net exports will depend on underlying trends in both output and consumption of petroleum products. Future output will reflect both US refinery runs and the production of hydrocarbon gas liquids outside refineries. Future domestic consumption will reflect prices, economic activity, and policies such as fuel economy standards for both light and heavy duty vehicles. So long as domestic output of petroleum products grows faster than their consumption, net petroleum product exports will continue to rise.

Edited from press release by Claira Lloyd

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