BofAML: Global Energy Weekly: El arma (no) letal de América

Redacción - Viernes, 29 de Mayo

• 
• 
• 
• 
• • 
  • 
  • 

Global Energy Weekly: America’s non-lethal weapon·  We met many politicians in favor of lifting the crude export ban at our US Energy Policy Conference. The politics are turning. If the ban goes, the $7.40 Brent premium over WTI in 2017 could shrink to $3. Forward US product cracks may also compress. While the ban stands, we see scope for "light for heavy crude" and "crude for product" swaps with non-bordering countries.

The shale revolution has reversed US energy dynamics 

America's shale revolution is now widely credited for having lowered global oil prices, improved US trade balances, and resulted in strong economic growth in the US South and Midwest. Yet, even when the economic benefits of US energy are clear, some outdated energy regulations remain in place. Is there a major upcoming shift in US energy policy? Politicians and policymakers presenting at our 2015 US Energy Policy Conference in Washington DC believe so. Many spoke openly in support of removing the crude oil export ban, fast-tracking LNG export permits, and opening up offshore drilling activity. 

We see plenty of reasons for crude exports, not many against 

We see six powerful reasons why the crude ban could be repealed in the coming 12 months. First, a collapse in domestic gasoline prices has reduced the political costs of tackling the issue. Second, a removal of Iran crude oil export sanctions coupled with a crude export ban at home seems Kafkaesque. Third, the collapse in prices is slowing down America's path to energy independence. Fourth, the Republican Party now controls Congress, making legislation more likely to get passed. Fifth, bipartisanship is back and Congress members want to show they can legislate. Lastly, oil is increasingly viewed as a key non-lethal weapon, a bipartisan foreign policy argument. True, the President can still veto any changes, but the politics of energy exports are finally more aligned with the economics. 

Department of Commerce has a lot of flexibility on exports 

Should the crude export ban remain in place, we learned technocrats retain a lot of authority to help debottleneck America's energy economy. Exports of US crude oil to Canada averaged 320 thousand b/d in 2014 and several US companies have received approvals to export stabilized condensate. Moreover, some companies seem to be searching approval for "light for heavy crude swaps" and "crude for product swaps" with non-bordering countries. Exporters only have to show that crude going out is equal or worse quality than crude or product coming back in. Thus, should a refining wall be reached, firms would arguably find plenty of compelling technical and economic reasons to apply for export permits.  

2016 Brent, product spreads look expensive vs. WTI 

In sum, we now think there is a 50%+ chance that the longstanding US crude export ban will be repealed over the next 24 months. Should crude exports be allowed, the $7.40/bbl Brent premium over WTI crude oil in 2017 could shrink to $3/bbl. Forward petroleum product prices relative to US domestic crude could also compress, negatively impacting refiners. Lastly, we see continued support for US nat gas prices in the medium term from LNG exports. Still, the collapse in global oil prices will likely slow down the build out of future US LNG export facilities, ultimately capping the impact on US nat gas prices in the medium term. 

 Click for full report*

[Volver]