|U.S. net fuel exports to double in 2015-Wood Mackenzie |
Mon Mar 12, 2012 5:29pm EDT
* US exports to grow by 450,000 bpd by 2015
* Weak local demand, cheap shale oil behind increase
* Competition with Brazilian refiners likely in three years
By Selam Gebrekidan and Kristen Hays
San Diego, Calif March 12 (Reuters) - U.S. net exports of oil products will likely double in the coming three years as the country's refiners ramp up output while local demand wanes, research firm Wood Mackenzie said on Monday.
The nation's net trade surplus for refined fuels - exports minus imports - will increase by about 450,000 barrels-per-day in 2015, the firm said addressing the the annual meeting of the American Fuel and Petrochemical Manufacturers in San Diego, California.
The United States became a net exporter of refined products last year for the first time since 1949, after it shipped out 439,000 bpd more fuel than it imported, according to the U.S. Energy Department.
This followed a large dip in domestic consumption of gasoline and distillates as fuel efficiency improved in the country's vehicle fleet, renewable fuels expanded their market share and the nation's economy suffered under the recession.
The rising exports have attracted criticism this election year as gasoline prices climbed to a winter record high and refinery closures in the U.S. Northeast threatened further price hikes.
However, falling demand and rising production are behind the rising exports, according to Wood Mackenzie.
Since its peak in 2005, U.S. demand for refined oil products has fallen by 1.9 million bpd and last year's consumption was 150,000 bpd lower than in 2010, according to Wood Mackenzie. Meanwhile, refinery utilization in the U.S. Midwest and Gulf Coast regions has jumped in the last three years thanks to larger supplies of cheap crude from the nation's prolific shale prospects.
"We've got U.S. refiners running hard and demand not changing much. So the extra supply is going to be exported," said Alan Gelder, head of oil research at the consultancy.
In addition, about 1.3 million bpd of refining capacity in Europe is under risk of permanent closure, opening up opportunities for U.S. refiners to supply Europe with more distillates. Utilization of existing European refineries will further be tempered because of higher operational costs related to the European Union's Emissions Trading Scheme.
New markets are on the horizon as well. Gelder says export to Sub-Saharan Africa will likely increase in the coming years.
"At the moment you've got West Africa supplied by India-they're putting it on large ships and sending it off to West African Coasts. That could be done by refiners in the United States," he said.
Wood Mackenzie's projections assume high oil prices in the world market, continued growth in U.S. shale output and refiners' unimpeded access to neighboring markets.
But competition from Latin American export refiners will narrow U.S. firms' advantage by 2015, according to Gelder
This is especially so if Petrobras' Premia I and II export refineries, currently under development in Brazil, come online as planned in three years.
"They'll be targeting the Atlantic basin so there will be competition with the Gulf Coast (refiners)," Gelder said.
U.S. refiners will need to build terminals, secure market access through long- term supply agreements with importing countries, and rent or build tanks to hold on to their markets, he added. (Editing by Bob Burgdorfer)