A major seismic shift took place around the US energy sector when federal officials detailed certain aspects regarding shipping of oil abroad. It is expected that export of shale oil will surge.
With the allowance of exporting ultra-light crudes after being refined minimally, trends associated with rising of gas and oil producer stocks, and shrinking of refiner stocks could be witnessed. The cost of crude oil jumped higher.
In a statement released to Pioneer Natural Resources, the BIS confirmed that removal of condensates or flammable gases was sufficient for light oils to be considered as refined. Note that US law allows export of refined products, although not crude oils.
At present, the US is unlikely to welcome higher costs of oil, as gasoline cost is already reaching the sky. The White House stated that the ruling of the commerce department could not be considered as a change in policy.
Energy companies as well as politicians have been pushing for reversing the export ban existing for 40 years. According to drillers, even though the ban raised production, the excessive availability of domestic oil may result in slower output.
The WST recently released news that the department of commerce gave way to export by private ruling under immense pressure. However, a department spokesperson informed Reuters that the ruling’s basis was commodity class oriented.
Export administrations assistant secretary Kevin Wolf put more clarity into the matter by emphasizing that the policy changes only applied to particular items.
Yet, the rise of oil to $106.66 for each barrel only highlights a gray regulatory area. Even though export of directly produced condensates from oil fields is not allowed, same oil type is allowed to be exported if emerging from refinery or natural gas plant
Most Asian counties are likely to welcome any oil supply by USA, even though majorly Asian counties depend on the Middle East.
The shale oil boom may even put United States at the top spot of world crude suppliers, even ahead of Russia and Saudi Arabia.
With refiners having invested billions for processing heavy Mexican and Venezuelan oils, certain light oil has been proved to be difficult to process near Louisiana and Texas.
Even though the extent limit or date of beginning of condensate shipping has not been clearly stated, Enterprise, with its huge Houston storage, is confident that it can start export of light crude any moment. Running though stabilizers for shaving off volatile liquid parts, such condensate has been prepared. Stabilizers can be witnessed around Eagle Ford of Texas quite commonly.
by Redacción Gas Shale México