Feb. 28 (UPI) -- A global market looking to balance OPEC output declines and an expected increase in U.S. pipeline capacity could make oil exports attractive, analysis finds.
The U.S. Energy Information Administration reported last week that total crude oil production at just over 9 million barrel per day, showing the regional market is gaining ground despite crude oil prices at about half their peak from 2014. Total crude oil exports, meanwhile, passed 1 million barrels per day for their highest level ever.
A 40-year-old ban on crude oil exports was overturned by President Barack Obama during his second term in office. U.S. oil transport is limited by the pipeline capacity feeding southern ports, though if the Dakota Access Pipeline is completed, that could move up to 470,000 bpd to the U.S. south.
"That will leave more oil available for export from Houston terminals, an opportunity that has already piqued the interest of Asian refiners, particularly in the wake of Organization of Petroleum Exporting Countries supply cuts effective since January," S&P Global Platts Oil Futures Editor Geoffrey Craig said in a statement.
OPEC in January implemented a plan to limit production to 32.5 million bpd in an effort to balance a market that's flush with oil. That move pulled crude oil prices above $50 per barrel, but made it more economic to return to work in expensive basins like U.S. shale.
North American recovery is apparent in rising activity in exploration and production, a trend characterized by rig counts. Last week, oil field services company Baker Hughes reported a rig count of more than 600 for the first time since October 2015.
More than a year ago, after the U.S. export ban was lifted, U.S. Sen. John Hoeven, R-N.D., said the United States was looking to take the pole position in energy on the global stage. The United States is "locked in a global battle" for oil dominance, he said.
Craig with Platts said the U.S. market was getting a hand by the very OPEC that Hoeven said was pressuring the domestic energy sector.
"This [situation] is fortunate for U.S. producers, given that the increased output has coincided with market developments that look favorable for exports," he said.