Oct. 19 (UPI) -- An increase in crude oil exports, which reached an all-time high, helped lead to the decline in storage levels for the U.S. market, data analysis show.
Data from the U.S. Energy Information Administration, published Wednesday, show oil exports averaged 1.6 million barrels per day over the last four weeks, a span than included the all-time high of 1.9 million bpd for the week ending Sept. 29. The four-week moving average for exports last year was 467,000 bpd.
Geoffrey Craig, oil futures editor for commodity pricing group S&P Global Platts, said in an after-market commentary that U.S. oil exports were supported by the discount for West Texas Intermediate, the U.S. benchmark for the price of oil, relative to Brent, the global benchmark.
"That spread has been around $5 to $6 per barrel this month, which is still wide enough to keep exports elevated," he said in an emailed report. On the other hand, the Brent premium over WTI could discourage imports into the U.S. market, "a development that might take some time to materialize."
U.S. shale oil company Continental Resources announced late Tuesday it sold 1 million barrels of oil from the Bakken shale basin to a Houston-based trading company, which intends to send the oil to China. CEO Harold Hamm said that, two years since the end of a ban on crude oil exports, that represented a "new normal" for the United States.
Hamm said that, with "modern modes of transport in the crude oil sector," the spread, or difference, between WTI and Brent shouldn't exist.
Brent held a $6.10 per barrel premium over WTI in early Thursday trading.
Imports, meanwhile, were lower by 18.4 percent compared with the four-week average last year. By country of origin, imports from Canada, the largest foreign supplier to the U.S. market, were up 8.6 percent over the four-week average from 2016. Imports from Saudi Arabia, the second largest foreign supplier, were down 42.2 percent and Venezuelan exports to the United States were down 39.4 percent from the same period last year.
In the United States, federal estimates predict crude oil production by next year will be almost 10 million barrels per day, an increase of around a half million bpd from the 2017 estimate. Drilling data show a decline in the number of wells drilled, but not completed, in some shale basins. Wells completed loosely equates to the prospect for commercial operations, with completions indicating an operation is close to actual production. Uncompleted wells could indicate a potential slowdown.