The growing clout of U.S. oil means that any downward change in U.S. production would have an upward effect on global prices and vice versa.
This is what traders and analysts have observed this year, as Europe became a major destination for U.S. oil as it sought to replace sanctioned Russian barrels. But Asia has been receiving more U.S. oil, too, because of its competitive pricing, Reuters Earlier this year, in February, the number of oil swaps linked to oil produced in Texas hit a record. As of early 2023, the number of such swaps in total also sat at a record and has likely increased further since.
"As Midland becomes more and more important in the dated Brent assessment, it has a knock-on effect on other grades having to price themselves lower to compete with WTI Midland," Reuters quoted Vortexa market analyst Rohit Rathod as saying.The reason Midland is becoming more and more important in the dated Brent assessment is, again, the volume of U.S. crude being shipped abroad, which has averaged over 4 million barrels daily since the start of the year.
Yet politics aside, the growing clout of U.S. oil means that any downward change in U.S. production would have an upward effect on global prices and vice versa. For instance, the recent streak of drilling rig declines as reported by Baker Hughes, suggests flattening oil production. that production growth in May compared to April was a meager 19,000 bpd, excluding the Gulf of Mexico—a further suggestion that U.S.
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