As fresh economic worries in China and the United States weighed on demand growth in the short term, the oil prices fell on May 12, aiming for a fourth consecutive weekly loss. This could lead to increased volatility in the oil markets.
The Organization of the Petroleum Exporting Countries (OPEC) and its partners, known as OPEC+, determine their output supply based on the growth of fuel demand in two of the world’s top oil consumers.
Oil Prices On Track For Weekly Decline
Last trading saw a 43 cent, or 0.57 percent, drop in the price of a barrel of Brent crude. US crude futures for West Texas Intermediate (WTI) were down 33 cents, or 0.47 percent, to $70.54.
For the week, both benchmarks are expected to lose by more than 1%, which would record the longest run of weekly decrease since November 2021.
This comes after encouraging employment reports in the US—possibly boosting the labor market—and falling oil stockpiles caused both Brent and US WTI to rise in the first three sessions.
As increased output has filled the majority of the space on lines to the main south Texas export center in Corpus Christi, oil pipelines from the top US shale field to Houston that have been running half empty are filling again.
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4.5 Million Barrels Per Day in March
In March, US crude exports reached a record high of roughly 4.5 million barrels per day (bpd), driven by resurgent Chinese demand and favorable oil prices.
The European Union and the United Kingdom’s sanctions against the import of Russian petroleum have also increased demand.
As consumers gobble up the light, sweet oil, pipelines carrying it from the Permian area in West Texas to Corpus Christi are more than 90% filled, analysts said, forcing shippers to look for alternative routes.
Until Corpus Christi’s capacity increase made it the primary export hub, Houston was the top US export hub.
Houston has plenty of space. According to the study East Daley Capital, its pipeline utilization increased to 57% on average in 2022 from 49% the year before.
This makes it possible for new Permian basin production to reach Houston.
According to RBN Energy’s weekly Crude Voyager report, Corpus Christi’s crude export volumes made up over 60% of all US oil exports in 2022, up from 28% four years earlier.
Houston’s share decreased from 33% to 22% over the same time period.
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