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US shale output forces change in market norms
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Saturday, 29 Jun 2013
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Gulf News reported that even without a relaxation of the ban on US crude oil exports, the ripples of the shale revolution have already reached Asia. Nowhere is that more obvious than in changes it has forced in the official selling prices Saudi Arabia charges to its customers.

More than half of Saudi Arabia’s crude exports head to refineries in China and the rest of Asia. Not a single barrel of US shale oil is sent to the region because of the export ban.

Nonetheless soaring output of light sweet crudes from shales in North Dakota and Texas has already profoundly affected selling prices by displacing former imports from Nigeria, Libya and other light oil producers. One result has been a sharp narrowing of the former pricing differential between light and heavy crudes, which has intensified problems for African light crude producers.

Prior to 2011, the marginal barrel demanded by refiners around the world was becoming progressively lighter and sweeter, while the marginal barrel offered by producers was becoming heavier and sourer, creating a record price gap between light and heavy crude oils.

Source - Gulf News

(www.steelguru.com)


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