US crude oil exports are expected to moderate through the end of 2020, mostly on weakening output. The coronavirus pandemic hurts global oil demand, with consumption in the US down about 13% from a year earlier. As a result, producers cut their investment, which leads to lower production. US crude production is not expected to regain its pre-pandemic peak of 13 million bpd. Data from the US Energy Information Administration showed the country exported 2.1 million bpd of crude this month, the lowest in over a year.
At the same time, the discount for benchmark US crude futures against international Brent futures has narrowed to below $3/barrel since May. New York-based Mizuho analysts said that export tended to increase when the discount stood at $6/barrel or higher. US crude oil has become pricier due to declining shale output and multiple hurricanes that disrupted offshore production in the US Gulf of Mexico.
According to EIA, US crude oil output will likely decline by 800,000 bpd to 11.45 million bpd in 2020 and to 11.09 million bpd in 2021. Exports to Europe are expected to decrease to 16.2 million barrels in October, compared to a record 32.6 million barrels in September. Shipments to Asia are expected to reach roughly 52 million barrels in November, close to a record of 53.1 million barrels last month. China is expected to receive about 28.4 million barrels of American oil next month.
