Over the past two years oil companies have been lobbying congress to end the ban on exporting oil from the US. This week Congress is voting on a TRILLION dollar tax, and spending bill. Hidden inside the massive bill, is a section ending the US ban on exporting oil.
Obama is expected to sign the bill despite his veto threats in the past against ending the oil export ban.
This will not change anything in the short term as US crude market prices are so close to the global market crude prices.
The difference between Brent Global Crude Markets and WTI US Crude Markets is much smaller than it has been historically. WTI Crude opened today at $35.52/bbl and Brent Crude opened at $37.39/bbl a difference of $1.87a bbl. Not much advantage or money to be made there.
WTI (Yellow) and BRENT (Green) Crude Oil Price/bbl history
According to the Energy Information Administration (EIA) Crude Exports and Petroleum Products as of last week were 4,598,000 bbls a week. Imports of Crude and Petroleum Products is currently 10,429,000 bbls with a net difference of 5,831,000 bbls a week. This shows the little demand for US Crude and petroleum products.
In the long run though this could be a game changer for US oil producers. As it gives them a place to sell the oil they are now producing. But until the world becomes less oversupplied, the advantages of a more open market are negligible.
