Today in Energy

July 18, 2012

April 2012 sets U.S. monthly record for distillate net exports

graph of U.S. monthly distillate fuel trade balance, January 2005 - April 2012, as described in the article text
Source: U.S. Energy Information Administration, Petroleum Supply and Disposition.
Note: Net exports equals gross exports minus gross imports.

The increase in distillate exports has been one of the main drivers behind the United States changing from a net petroleum product importer to net petroleum product exporter over the last several years. U.S. Energy Information Administration (EIA) monthly data for April indicate that net exports of distillate fuels, such as diesel for transportation use and heating oil, reached 980,000 barrels per day (bbl/d), the highest volume since monthly U.S. trade data have been recorded. The distillate trade balance for April 2012 reflects both a near-record level of exports and the lowest level of monthly imports in more than 25 years.

In the first four months of 2012, gross distillate exports averaged 947,000 bbl/d, a 215,000-bbl/d (29%) increase over the same period in 2011. This average was supported by April exports that were the strongest to date in 2012 at slightly less than 1.1 million bbl/d, a 206,000-bbl/d (24%) increase over April 2011. April 2012 exports also represented the second-highest monthly total ever.

Sustained high levels of gross distillate exports have been supported by growth in global demand for distillate fuels, especially in the developing economies not part of the Organization for Economic Cooperation and Development (non-OECD). In response to global demand growth, wholesale prices for distillate fuels have generally been high in recent years compared to prices for other fuels. This price difference has encouraged the production of distillate at U.S. refineries.

The Central and South America region, along with Mexico, are the principal destinations for U.S. distillate exports. Demand for distillate fuels in these markets has been at levels higher than what local refineries can provide. In the first four months of 2012, 60% of U.S. distillate exports went to Central and South America or Mexico, up slightly from 57% for the same period in 2011.

While global demand has increased exports, lower consumption in the United States has reduced the need to import distillate. Through April 2012, U.S. distillate consumption was down 112,000 bbl/d (3%) compared to the same period in 2011, in part as a result of reduced consumption of heating oil during the mild winter. The lower demand combined with higher distillate production led to significantly reduced levels of imports, which through April 2012 were down 41% year-over-year. In April 2012, the United States imported 98,000 bbl/d of distillate fuel, which was the lowest monthly total since August 1985. Most U.S. distillate imports are shipped from Canada (82% in 2012) to the East Coast.

See the July 5, 2012 edition of This Week in Petroleum for a more detailed version of this article.