U.S. crude oil loadings saw a significant decrease last week, dropping by 211,000 barrels per day (Mb/d) to an average of 3.7 million barrels per day (MMb/d). This reduction brought the four-week moving average down to just under 3.7 MMb/d, the lowest level recorded since late June.
Decrease in Tanker Activity
The number of tankers loading crude oil for export at U.S. Gulf Coast terminals also declined. Only 28 tankers were recorded, a reduction of six from the previous week. Notably, the number of Very Large Crude Carriers (VLCCs) loading directly at export terminals increased slightly, with seven VLCCs loading compared to five in the previous week. However, after two consecutive weeks with 10 VLCCs entering the Gulf Coast for loading, only four entered last week.
Shifts in VLCC Departures and Destinations
Nine VLCCs departed the Gulf Coast last week, with seven heading to Asia. Of these, five were bound for China, and one each to India and South Korea. The destinations of two VLCCs, the Advantage Verdict and the Dhalkut, remain undeclared.
Increase in Gulf Coast Exports to Asia
Exports from the U.S. Gulf Coast to Asia experienced an increase, rising to 8.5 million barrels (MMbbl), up by 720,000 barrels (Mbbl) or 9% from the previous week. However, this figure remains below the year-to-date weekly average of 10.9 MMbbl. Additionally, around 6.5 MMbbl were loaded last week without declared destinations, suggesting these volumes may be revised upward in the coming weeks.
China-Bound Exports Surge
Despite lower refinery margins due to an economic slowdown, China-bound crude oil exports saw a significant surge last week. A total of 5.1 MMbbl were sent to China, up from just 0.8 MMbbl the previous week and well above the year-to-date average of 2.2 MMbbl.
Freight Rates and Export Incentives
VLCC freight rates, which had been declining in recent months, saw a 4.9% increase for Gulf Coast-bound shipments to Asia last week. This marks the strongest rates in over a month and represents the first consecutive weekly increase since mid-May. Additionally, narrowing West Texas Intermediate (WTI) Midland differentials at ports such as Corpus Christi appear to have incentivized the recent uptick in cargoes headed to China.
