U.S. Was Net Oil-Product Exporter in 2011

By Barbara Powell - Mar 1, 2012 5:52 AM GMT+0700

Daniel Acker/Bloomberg

A crude oil well site outside South Heart, North Dakota, on Feb. 10, 2012.

The U.S. exported more gasoline, diesel and other fuels than it imported in 2011 for the first time since 1949, the Energy Department said today.

Shipments abroad of petroleum products exceeded imports by 439,000 barrels a day, the department said in the Petroleum Supply Monthly report. In 2010, daily net imports averaged 269,000 barrels. U.S. refiners exported record amounts of gasoline, heating oil and diesel to meet higher global fuel demand while U.S. fuel consumption sank.

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Oil demand in Latin America will climb 2.5 percent to 6.64 million barrels a day this year, while contracting 2.4 percent in Europe and 0.5 percent in North America, the Paris-based International Energy Agency said Feb. 10. Mexico’s use of U.S.- made gasoline was 44 percent higher last year than in 2010, Energy Department data show.

“There’s stronger global demand for clean fuels and stronger demand for fuel, outpacing production in places like South America,” said Sander Cohan, a global transportation fuels analyst and principal with Energy Security Analysis Inc. in Wakefield, Massachusetts.

Gasoline futures for March delivery on the New York Mercantile Exchange settled at $3.0423 a gallon today, up 11 percent in the past year. Heating oil was up 9 percent during that period to $3.188 a gallon.

Distillate Exports

Distillate shipments rose 30 percent from a year earlier to a record 854,000 barrels a day, and daily exports of finished gasoline and blending components jumped 57 percent to 526,000 barrels in 2011.

Refiners are expanding on the Gulf Coast and in the Midwest, even as unprofitable plants along the East Coast were shut. Operable capacity in the U.S. climbed 0.8 percent to 17.7 million barrels a day in December from a year earlier.

U.S. refineries in the Gulf Coast, where about half of U.S. capacity is located, operated at 88.8 percent last year, up from 88.6 percent in 2010.

“It helps keep refinery utilization rates up in this country,” Bill Day, a spokesman for Valero Energy Corp. (VLO) in San Antonio, said in a telephone interview. “Otherwise we would see what we’re seeing on the East Coast, where refineries are shutting.”

In the fourth quarter, Valero, the largest U.S. independent refiner with 14 North American plants, exported about 5 percent of its gasoline output and 17 percent of its heating oil and diesel production, Day said.

Export Forecast

The U.S. will ship abroad 350,000 barrels a day more petroleum products that it imports in 2012 and 320,000 barrels daily in 2013, according to the department’s Short-Term Energy Outlook report released on Feb. 7.

Gasoline demand in the U.S. sank 2.9 percent to 8.736 million barrels a day last year as pump prices averaged $3.521 a gallon, the highest in records dating back to 1919.

Total U.S. oil product demand fell 9.5 percent to 18.8 million barrels a day last year from 20.8 million in 2005, department data show.

“The reason we can export so much is demand in the U.S. is weak,” Cohan said. Since 2005, the U.S. has lost nearly 2 million barrels a day of total product consumption, he said.

Diesel Demand

Global demand for diesel is rising faster than for gasoline, prompting refiners to increase yields of distillate fuels. A barrel of crude refined in the U.S. yielded 31.2 percent distillate fuel in December, the most ever. Distillate exports reached 1.13 million barrels a day during the month as cold weather in Europe boosted demand. Shipments to the Netherlands doubled, the data show.

“This year was one of the most mild winters on record in the U.S. at a time when the winter weather in Europe was just atrocious,” said James Cordier, portfolio manager at OptionSellers.com in Tampa, Florida.

Total net crude and product imports fell 11 percent from a year earlier to 8.436 million barrels a day, the lowest level since 1995, department data showed. Domestic oil output rose 3.6 percent to 5.673 million barrels a day, an eight-year high.

To contact the reporter on this story: Barbara J Powell in Dallas at bpowell4@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net