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US crude: How much can Indian refiners bet on?
Nov 23: Is it possible for Indian refiners to source more crude out of the US?
8US crude oil exports surged to a record high of 1.8 mb/d in October 2017, 1.2 mb/d higher y/y.
8A few months earlier, the market had fervently questioned the ability of the US to export more than 1.2 mb/d, suggesting capacity constraints would cap departures at this level and result in large inventory builds on the US Gulf Coast.
8The viability of export arbitrage given the prevailing economics at the time and the international market’s appetite for ‘low quality’ US oil also came under scrutiny.
8But the reality on the ground was different, as physical players re-affirmed their belief in the adequacy of US dock capacity and the combination of wide WTI-Brent spreads and strong cash differentials in Asia and the North Sea lubricated the gears of arbitrage.
8Indeed, at the end of October, US exports topped 2 mb/d.
8But can this trend accelerate?
8There are a host of factors Indian refiners will have to take into account before betting on US supplies
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