Growing U.S. oil demand may inhibit the rapid development of exports

According to a report by Bloomberg News Agency on May 27, the US oil market is showing obvious signs of contraction supported by strong demand, which raises the question of whether the booming US crude oil exports will slow down.

Two key indicators measuring the strength of the US market rose to their highest levels in several months this week, suggesting that the spot supply has become more tight and traders are willing to pay a premium to obtain more direct crude oil supplies.

This in turn has led to an increase in the price of West Texas Intermediate (WTI) crude oil relative to the global benchmark Brent crude oil.

Paul Horsnell, head of commodities research at Standard Chartered Bank, said: “The arbitrage window does seem to be closed a bit.

This week, the monthly spreads of West Texas Intermediate crude oil futures and similar spreads in the physical market rebounded to their highest levels in several months.

It's not just the gap between WTI and Brent that is shrinking.

Although the US market is showing signs of strengthening, Brent crude oil may face more resistance.

The price of Brent crude oil was previously supported by the positive support that several key North Sea oil fields entered the overhaul period in June.

According to the oil tanker tracking data compiled by Bloomberg News, the crude oil cargo shipped by US exporters to Europe in May reached the highest point in 9 months, and the crude oil load increased at the end of April.

Li Jun compiled from Bloomberg

The original text is as follows;

Growing US oil demand could crimp booming crude exports

The US oil market is showing clear signs of tightening on the back of strengthening demand, raising a question about whether the nation's booming crude exports could slow.

Two key measures of US market strength rallied to the highest levels in months this week, suggesting physical supply is becoming more constrained with traders willing to pay premiums to secure more-immediate barrels.

That in turn is helping to make West Texas Intermediate more expensive relative to the global oil price benchmark Brent.

"It does seem the arb window has closed a bit," said Paul Horsnell, head of commodities research at Standard Chartered.

The nearest WTI futures inter-month spread, and its equivalent in the physical market, rallied to the highest levels in months this week.

It's not just the difference between WTI and Brent that's been narrowing.

　　While the US market shows signs of strengthening, Brent may face more headwinds.

　　Brent crude prices had previously also been supported by heavy maintenance at several key North Sea oil fields in June.
That's becoming less of an issue, with the most immediate Brent futures contract now July.

　　US exporters boosted deliveries to Europe to a 9-month high in May, with loadings weighted toward the end of the April, according to tanker tracking data compiled by Bloomberg.