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Port of Corpus Christi sees crude exports plunge 35% and counting – S&P Global

FILE PHOTO: Tanker sails out of the Port of Corpus Christi after discharging crude oil at the Citgo refinery in Corpus Christi, Texas. Eddie Seal | Bloomberg | Getty Images

PortandTerminal.com, May 17, 2020

HOUSTON, TX – Energy research firm S&P Global is reporting that Crude oil shipments from the United States’ top oil-exporting hub have plunged 35% since the first quarter with more declines expected this summer as the impacts of the coronavirus pandemic continue to ripple throughout the industry.

Activity levels at the Port of Corpus Christi in Texas and throughout much of the Gulf Coast were buoyed for a while by preexisting contracts and hedged oil prices even as crude prices fell to record lows from the collapse in global oil demand. But a lot of those deals are now rolling off, and the stark dip in demand is becoming more clear, said port CEO Sean Strawbridge.

“We’ve certainly seen a drop. Both crude and refined products are down significantly from their first-quarter record highs,” Strawbridge said. “It will continue in June and perhaps even through the summer.”

Crude exports from the Port of Corpus Christi fell from a record-high average of 1.7 million b/d in the first quarter down to about 1.1 million b/d last week, he said, and Strawbridge expects the swoon to deepen a bit more in the weeks ahead.

The loss in volume has force America’s biggest oil-export hub to slash spending and possibly defer more than one-third of its 2020 capital budget amid the worst price rout in nearly three decades.

According to the US Energy Information Administration, US crude exports the week ending May 8 averaged 3.53 million b/d. S&P Global Platts Analytics data shows US crude exports climbing to 4.06 million b/d for the week ending Friday. Exports from Corpus Christi and Ingleside, which the Port includes in its calculations, have averaged at roughly 1 million b/d over the past two weeks, Analytics data shows.

US producers are shutting in production and storing more crude longer term both on and offshore. With global oil demand having plunged by as much as 30% in April, crude exports were expected to eventually feel an impact, even as the arbitrage remains open.

The arbitrage into northeast Asia is still open for WTI crude at Houston, with a pricing advantage of about $4.15/b over Russian ESPO crude, Platts Analytics calculations show.

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