US becomes net exporter of fuel

US becomes net exporter of fuel
By Gregory Meyer in New York
The Financial Times
Published: May 2 2011 22:32 | Last updated: May 2 2011 22:32
The US has become a net exporter of fuel for the first time for nearly 20 years as drivers struggle with high petrol prices.
Energy department data show the world’s largest oil consumer in February shipped out 54,000 barrels more petroleum products each day than it purchased on the global market.
After a five-year decline in net imports, the US became a net exporter in late 2010, a trend analysts say is confirmed by the latest data.
The shift comes as Washington confronts voter frustration over petrol prices that have soared 36 per cent in the past year to nearly $4 per gallon, the highest level since mid-2008.
Barack Obama, the US president, has called for an end to oil company tax breaks, while his attorney-general has launched a taskforce to investigate oil price manipulation.
The American Petroleum Institute, an industry group, reported US refined product exports rose 24.4 per cent in the first quarter of 2011 from a year ago, to 2.49m barrels per day. Imports declined 14.4 per cent to 2.16m b/d. The export increase is led by diesel and finished petrol, data from the Energy Information Administration show.
For years the US was not only a net importer of crude oil but also of refined fuels. But oil demand of 19m b/d, while on the rebound, remains 2m b/d below pre-recession levels.
Roads are also carrying less traffic than in 2007 and refiners have boosted fuel output.
“Even though our consumption is up from where it was a year ago, we still have plenty available for export,” said Rayola Dougher, API senior economic adviser.
The leading customers for US oil products are in Latin America, where refineries often cannot keep up with fuel consumption. Mexico relies heavily on US-made fuel. Ecuador, a member of the Opec oil cartel, is also a buyer.
US refineries on the Gulf of Mexico are near these markets. Valero Energy, a US refiner, has told analysts petrol exports were fuelled by demand in Mexico and Brazil. “I do believe that we are seeing just a long-term trend here that’s going to allow Gulf Coast refiners to continue to export barrels,” said Joe Gorder, executive vice-president.
Petrol in Gulf states such as Texas is cheaper than in east-coast cities such as New York and Boston. But it is often more profitable for traders to export it, said Philip Verleger, an independent oil economist. A pipeline connecting the Gulf to New York is fully booked, while federal law requires traders to hire expensive US-flagged vessels to ferry oil in domestic waters.
Petrol exports have become a politically sensitive issue elsewhere as oil prices surge. Russia last week significantly increased petrol export tariffs in response to domestic fuel shortages.