BP books 1mn bl US-Europe crude export

OREANDA-NEWS. September 08, 2016. BP has provisionally chartered an oil tanker to ship about 1mn bl of US crude for mid-September loading across the Atlantic Ocean, said shipbrokers, as the oil major joins other energy companies to capitalize on favorable pricing of US crude in Europe and depressed freight rates.

The NS Burgas, a Suezmax, has been booked to carry the US crude cargo to an unconfirmed destination across the Atlantic at a rate of about \\$5.55/t, or about 75?/bl.

BP does not comment on its day-to-day operations.

The arbitrage opportunity to ship crude out of the US Gulf coast is favorable amid a relatively wide spread between WTI and international benchmark Ice Brent, US Gulf coast oil traders agree.

US crude exports to countries other than Canada rose to over 350,000 b/d in May, before dropping sharply to 103,000 b/d in June, but a wider WTI-Brent spread suggests exports will bounce back up.

Since the beginning of August, the discount of front month WTI prices to Argus North Sea crude forward prices has averaged \\$2.08/bl, up from an average of 75?/bl in the May-July period.

Further improving the economics for US crude exports are depressed freight rates. Charterers have been able to secure lower freight rates in recent months as crude supply outages in Nigeria and reduced production in Venezuela have left a surplus of open tankers in the Atlantic basin.