The U.S. is set to get a bit more possessive about its own oil, sparking a bidding war with eager buyers in the other side of the world.
Asian refiners from China to Taiwan and Thailand have boosted purchases of American crude in recent months because it was increasingly turning cheap relative to supplies from other parts of the globe. They’re now about to face stiffer competition as the U.S.’s own demand rebounds, with domestic refineries restarting after spring maintenance, according to industry consultant Energy Aspects Ltd.
“There will be a tug of war between U.S. domestic demand and international markets,” said Virendra Chauhan, a Singapore-based analyst at Energy Aspects. “That’ll determine how much American crude will flow to Asia in the coming months.”
While more than 1 million barrels a day of refining capacity in the U.S. was offline during May, only less than 200,000 barrels a day will be affected over the following three months as plants pump out fuel to meet demand during the summer driving season, according to the consultant. Crude volumes going into American refineries have also risen in recent weeks, data compiled from the Department of Energy show. [read more]