The Department of Energy recently reported that the United States now stands as a net exporter of refined gasoline, diesel and other fuels for the first time since 1949. Daily shipments of petroleum products abroad now exceed net imports by 439,000 barrels per day according to the Energy Department’s monthly report. This shift towards net fuel exporting was likely motivated by U.S. refiners’ notable increase in fuel production in tandem with America’s waning monthly consumption.
While the United States is tapering its daily fuel consumption, economically burgeoning nations have markedly increased their demand in correspondence with infrastructure development. As Bloomberg reports, Latin America’s oil demand will rise 2.5% to 6.64 million barrels per day this year; Mexico’s daily consumption of U.S.-refined gasoline was 44% higher in 2011 than 2010.
Gasoline futures are rising on the news of America’s development into a net-fuel exporter. Gasoline futures for March delivery settled at $3.04 per gallon today, up 11% from last year. Similarly, heating oil was up 9% to $3.19 per gallon over the same period.
The United States has made broad changes to its refinery infrastructure — closing unproductive facilities along the Eastern seaboard and bolstering refining operations throughout the Gulf Coast and Midwest. Output has risen correspondingly over the past year; overall operable capacity rose to 17.7 million barrels per day in December, a 0.8% increase from the figures drawn a year prior. In its fourth quarter, Valero Energy (NYSE:VLO), the largest independent U.S. refiner, exported 5% of its gasoline production and a marked 17% of its diesel production.
U.S. demand for oil products maintains a steady downward trend year-on-year; domestic consumption dropped 9.5% from 20.8 million barrels per day to 18.8 million barrels per day between 2005 and 2011. As foreign consumption of refined fuel continues to climb, diesel stands unique as a high-demand commodity. Refiners have correspondingly prioritized the production of distillate fuels. An average barrel of crude refined in the U.S. yielded 31.2% distillate fuel in December, the highest figure yet recorded. Domestic oil output rose 3.6% to 5.67 barrels per day in 2011, an eight-year high.
— Adam Patterson, InvestorPlace Assistant Editor