Good morning, here's what the Oilman has for you today:

• U.S. Oil Exports to Europe Exceed 2MM Barrels

• Oil Prices Rebound After Banking Fears

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U.S. Oil Exports to Europe Exceed 2MM Barrels

U.S. crude oil exports to Europe achieved a new high this month, with the United States reinforcing its position as a key supplier to the region amid Russia's war with Ukraine.

International discounts help

U.S. Exports reached an average of 2.1 million barrels per day. This was was driven by large U.S. crude discounts compared to Brent.

The price difference between West Texas Intermediate (WTI) and Brent expanded to over $7 in January, making U.S. oil more affordable for international buyers.

Reduced oil demand from domestic refineries helped as well

A holiday freeze shut down the operations of a number of domestic refineries. This led to refinery maintenance and less demand for WTI.

Increased exports have led to price gains for top U.S. crude grades, with both WTI Midland and WTI at East Houston rising substantially compared to the previous quarter.

If the Brent-WTI spread remains wide, strong export performance is to be expected.

But what as domestic demand grows in the coming months?

Refinery maintenance will soon come to an end. The summer will bring increased travel and driving.

But the oil supply is also expected to rise.

U.S. shale producers are contributing to the supply increase, and the Biden administration plans to sell 26 million barrels of crude oil from the Strategic Petroleum Reserve, further affecting the market dynamics.

The surge in exports reflects the United States' growing importance as a crude oil supplier on the global stage, which has significant implications for the world's energy market and geopolitical landscape.

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Oil Prices Rebounds After Banking Fears

After plummeting to 15-month lows, oil prices rose on Tuesday as fear of financial contagion and banking risks leveled out:

• Brent crude settled up $1.53 (2.1%) at $69.33/bbl

• U.S. WTI closed up $1.69 (2.5%) to $69.33/bbl

What motivated the price crash?

Fear, according to Paul Andurand of Andurand Capital. The drop was based on speculation rather than fundamentals.

Harris Kupperman commented on Twitter, “Important to keep this all in perspective. So far, we’ve lost 2 sh-t coin banks and the guys who underwrote the junior debt for Ponzi Schemes. Banks run by adults are doing fine…”

So where does oil go next?

Up and to the right according to Gunvor’s CEO and Andurand’s CEO.

Torbjorn Tornquist of Gunvor expects oil prices to rise based on the Chinese market.

Andurand sees $140/bbl by the end of the year.

Shubham Garg, the CEO & Founder of White Tundra Resources and White Tundra Investments, dropped a few truth bombs on Twitter:

“Oil is world economy's lifeblood, and it can't be printed.”

True. He continued:

“The longer crude prices stay <$80-100, the higher they reach on the other side and sustain there for longer.”

Around the Digital Patch

🏛️ Andurand Capital CEO sees $140/bbl oil this year.
🇨🇳 China and Russia meeting should worry the West.
⛽️ California Governor tries to cap oil prices, but sees no benefit at the pump.

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