North American Production Continues to Alter Cargo Flows

The US Energy Information Agency (EIA) released their first Short-Term Energy Outlook (STEO) of 2013 earlier this week to much fanfare in the financial press. A continuation of production capacity increases in North America was indeed front page news. 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. Download here