U.S. refineries have benefited from cheaper shale oil
An extensive slate of refinery maintenance on the U.S. Gulf Coast and in Canada has sapped gasoline availability, leading to a 70-percent increase in cargoes sailing west from Europe this month over levels in August – usually the time of peak demand.
“What we’re seeing now is not normal,” one trader said. “The strength in the United States is dramatic. There are a lot of barrels going over.”
Traders said the U.S. shortage could get worse as demand in West Africa and the Middle East is also now attracting European cargoes.
The pull bucks a trend of lower U.S. gasoline imports from Europe, which fell almost 40 percent between 2008 and 2013, according to Eurostat data, as demand has fallen and as U.S. refineries have benefited from cheaper shale oil.
The longer-term drop in exports to the United States has hit European refiners’ profits hard, leading to a string of closures, and causing a number of trading houses to cut their gasoline desks. But the current spike in exports shows occasional opportunities still emerge.
A string of gasoline-producing units at major Texas refineries are currently in maintenance, including fluid catalytic crackers (FCCs) at ExxonMobil’s 300,000 barrel per day (bpd) Beaumont refinery and a crude distillation unit at Total’s 225,000 bpd Port Arthur refinery.