Oil market analysts said that US crude oil exports remain competitive at the $30s/barrel prices. The coronavirus pandemic has ravaged oil demand and prices. However, prolific Asian markets such as China, Japan, South Korea, and Vietnam have started to exit their containment measures. However, there are persisting question marks over an important market like India.
According to oil traders, the price of NYMEX WTI Houston Futures (HCL) at contract maturity to port is currently about $1.50/barrel lower than the physical price of Dubai swaps. For reference, Arab Extra Light grade, a comparable grade with WTI is currently trading at a premium of $0.20 to $0.35/barrel against Dubai’s average.
This means there are still opportunities that US producers with break-evens above $30/barrel, such as in the Eagle Ford basin can stay competitive in the East Asian markets. However, the near-term bearish outlook will unlikely to go away until at least the first quarter of 2021 when the aviation industry is expected to return to normalcy, the analysts said.
