U.S. Gulf Coast diesel exports down sharply - Reuters data
By Kristen Hays
HOUSTON, April 4 (Reuters) - Diesel fuel exports from the U.S. Gulf Coast declined sharply since December as increasing output from refiners in South American markets and brimming stocks in Europe squeezed key outlets, Thomson Reuters data show.
As a result, distillate inventories in the region have risen 27 percent since October to more than 50.8 million barrels, the highest since September 2011.
That level, 90 percent of the region's 26-year high of 55.9 million barrels reached in February 2011, has pressured cash ultra-low sulfur diesel (ULSD) differentials ULSD-DIFF-USG in the U.S. Gulf Coast market in recent weeks.
The U.S. Energy Information Administration said last week that distillate exports made up an average of 1.19 million barrels per day of the 4.3 million bpd of U.S. refined product exports last year. Most exports ship out from the Gulf Coast, home to about half of U.S. refining capacity.
However, Thomson Reuters Trade Flows data show that since December, diesel exports fell and stocks rose. In January the U.S. Gulf exported 502,253 bpd - down 33.5 percent from December - then 248,793 bpd in February and 96,287 bpd through March 18.
Diesel exports from the U.S. Gulf Coast face growing competition from Asia and the Middle East where huge new refineries such as Reliance's Jamnagar and Saudi Arabia's SATORP started exporting large volumes to Europe last year.
Contango in distillate markets in Europe and the U.S., where barrels sold in futures months fetch higher prices, has encouraged storage, pushing stocks to historically high levels.
In addition, import demand in some South American markets is softening, traders said. Continuación...