US petroleum product export growth slows
Published by Tom Mostyn,
Editorial Assistant
Hydrocarbon Engineering,
In the first half of 2019, the US exported an average of 5.47 million bpd of petroleum products, an increase of 19 000 bpd (0.3%) from the first half of 2018 and the slowest year-on-year growth rate for any half year in 13 years. Two factors that likely contributed to lower exports were lower US refinery runs in the first half of 2019 compared with the first half of 2018 and slowing global economic growth, which is limiting demand for petroleum products. In the first half of 2019, increased exports of propane and distillate offset decreased exports of all other petroleum products.
Distillate remained the largest US petroleum product export in the first half of 2019, averaging 1.3 million bpd, an increase of 60 000 bpd (5%) compared with the first half of 2018. Distillate has many uses, including transportation, manufacturing, agriculture, and residential, and commercial activities.
Mexico was the largest destination for US distillate exports during the first half of 2019, receiving 290 000 bpd, or 22% of total US distillate exports. Aside from Mexico, US distillate exports go mostly to Central and South America, including Brazil (13%), Chile (7%), and Peru (5%). US distillate exports also go to Europe, mostly to the Netherlands (4%), which is a transhipment country for some of the US distillate volumes.
Propane was the second-largest US petroleum product export in the first half of 2019, at 1.03 million bpd, an increase of 142 000 bpd (16%) from the first half of 2018. Propane is used as a space heating and transportation fuel and as a petrochemical feedstock. Most US exports of propane are destined for use as a petrochemical feedstock, mainly at facilities in Asia and Europe.
US residual fuel exports declined the most between the first half of 2019 and the first half of 2018, falling by 74 000 bpd to average 258 000 bpd. In the first half of 2018, Singapore was the top destination for US residual fuel exports, most likely to supply Singapore’s marine bunkering market. However, in the first half of 2019, trade press reported that Singapore’s bunker market was preparing for new international regulations that limit the sulfur content of marine fuels by drawing down higher sulfur residual inventories to make room for inventories that are lower in sulfur. As a result, average US exports of residual fuel oil to Singapore decreased 68 000 bpd (80%) in the first half of 2019 compared with the first half of 2018.
The US Energy Information Administration (EIA) forecasts that continued growth in petroleum product exports, albeit slower than in previous years, combined with increasing US crude oil exports, will result in the US becoming a total petroleum net exporter. The EIA’s October 2019 Short-Term Energy Outlook forecasts this change to occur in the 4Q19.
Principal contributor: Mason Hamilton
Read the article online at: https://www.hydrocarbonengineering.com/refining/25102019/us-petroleum-product-export-growth-slows/
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