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US oil is now encroaching on the key markets of the OPEC+ group, which has been restricting supply in an effort to boost oil prices.

US oil is stealing market share from OPEC+

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Surging U.S. oil production and shifting global oil flows amid geopolitical flare-ups have boosted American crude exports to record-high levels in recent months. Now U.S. oil is encroaching on the key markets of the OPEC+ group, which has been restricting supply in an effort to boost oil prices.

From Europe to Asia, buyers are purchasing more U.S. crude as sanctions against Russia and uncertainty over Venezuela’s sanctions relief renewal are making refiners anxious about importing Russian and Venezuelan crude. Europe has also turned to more U.S. oil as shipments from Asia are now taking longer to deliver cargo. Due to the Houthi attacks on commercial shipping, tankers mostly avoid the Red Sea/Suez Canal route – the fastest shipping lane from Asia to Europe – and are heading to the Cape of Good Hope around Africa.

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Source: Oil & Gas 360

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US oil and gas output still rising in response to high prices last year

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 U.S. oil and gas production continued to rise strongly in March – the delayed impact of very high prices that prevailed until the third quarter of 2022.

Oil output increased by 171,000 barrels per day (b/d) in March compared with February, according to the U.S. Energy Information Administration (“Petroleum supply monthly”, EIA, May 31).

The gains were led by the Lower 48 states (+137,000 b/d) and Gulf of Mexico (+45,000 b/d), which more than offset lower production from Alaska (-11,000 b/d).

Output rose by almost 10% in the first three months of 2023, compared with the same period a year earlier, and was the second-highest for the time of year after 2020.

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Source: Reuters

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The Texas crude WTI Midland’s inclusion in Dated Brent is the most significant overhaul of the measure in decades.

US crude sets world’s most important oil benchmark for first time

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U.S. oil is already having a profound impact on the world’s most important oil benchmark, effectively setting the price just after its inclusion in the measure.

WTI Midland — produced in the West Texas shales — joined the Dated Brent benchmark on Tuesday, in an effort to revamp a gauge that is used to set the price of more than two-thirds of the world’s crude. So far, that integration has proved successful.

bp Plc has been offering the grade for early June at a low level on a pricing window run by S&P Global Commodity Insights, better known by traders as Platts. As prices of the five other grades that comprise the benchmark were much higher, WTI Midland has essentially served as the key price maker.

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Source: Oil & Gas 360

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