Pakistan and Gulf Economist: NORTH AMERICAN CRUDE TANKER TRADE TO KEEP ON CHANGING IN TERMS OF FREIGHT FLOWS

“The continuous shifts of crude oil production among the countries of the North American continent will keep on altering freight flows and puzzling tanker owners as to where demand for cargoes will emerge and where this demand will be headed. According to the latest weekly report from analysts Poten and Partners, in the latest Short-Term Energy Outlook (STEO) issued from the US Energy Information Agency (EIA), a continuation of production capacity increases in North America was among the key issues discussed. “According to Poten, ‘although the growth to date in North American production has been well-documented, EIA forecasts a continuation of strong output growth in the near future. In fact, during the past year, the STEO forecast for US crude production has become more aggressive with each iteration. This growth, when combined with recent drops in US consumption and land-based transportation bottlenecks throughout North America, has continued to support the divergence between North American and global oil benchmarks. Between the resulting drop in US imports and the need for Canadian producers to gain access to other markets, developments are in motion that would no doubt have a substantial impact on tanker cargo flows going forward. Despite a recent decline in oil rig counts, the latest STEO projection suggests that US crude production should jump by another 890 kbpd in 2013, following a 780 kbpd rise during 2012. The forecast sees a deceleration in US output growth to 600 kbpd in 2014, but the STEO expectation for 2013 production has leapt by 1.48 mbpd since their January 2012 report. Including the EIA outlook for Canadian production, the agency now anticipates that North American output would be 1.14 mbpd higher by end-2013’ Poten said.”