Crude exports hit 3M barrels per day

U.S. crude oil exports hit a new high of 3 million barrels a day during a week in June, as producers shipped out more than a quarter of the nation’s record volumes of oil, the Energy Department reported.

The milestone follows record U.S. production, which is fast approaching 11 million barrels day, much of it coming from Texas, particularly the Permian Basin in West Texas. The surge in exports is also supporting higher oil prices as they help drain domestic inventories.

Crude stockpiles plunged by nearly 10 million barrels during that June week, the biggest decline of the year. That, in turn, helped drive crude prices to their highest levels since 2014. In New York, U.S. crude is trading above $74 a barrel.

Crude exports have climbed since late 2015, when Congress lifted a 40-year ban on oil exports that was put in place following the 1973 Arab oil embargo. After a slow start during the oil bust, export volumes picked up last year and started routinely hitting 2 million barrels a day by the end of last year.

It’s not just the lighter grades of crude from Texas shale shipping out. There’s also a growing international appetite — particularly in Asia — for thicker, sour grades produced in the Gulf of Mexico.

Most of those exports are moving from port hubs in the Houston Ship Channel and Corpus Christi, where energy companies are investing billions of dollars in pipelines and export terminals.

In June, a Very Large Crude Carrier, which can carry some 2 million barrels of oil, docked in Texas City. The Port of Corpus Christi is seeking federal funding to deepen and widen its ship channel to accommodate the largest oil tankers, which can only be partially loaded in the port.