ConocoPhillips will supply the first cargo of U.S. shale oil to be exported since a 40-year ban on such shipments was lifted less than two weeks ago.
The cargo will be comprised of crude and a type of ultra-light oil known as condensate from wells in the Eagle Ford Shale formation in south Texas, according to a statement by the Houston-based company on Wednesday. ConocoPhillips expects the shipment to finish loading at NuStar Energy Inc.’s Corpus Christi, Texas, terminal Thursday.
The cargo will be sold to merchant trader Vitol Group, which last week announced plans for a separate 600,000-barrel shipment of domestic crude that will load from Enterprise Products Partners LP’s Houston terminal during the first week of January. The producer of the oil for the first cargo was not identified.
Overseas demand for U.S. crude is expected to remain muted because of a worldwide glut that has pushed oil prices to the lowest in more than a decade. A 64 percent surge in American oil production over the past five years driven by technological breakthroughs in shale drilling has compounded an oversupply by OPEC nations, Russia and other producers.
Until the export ban was lifted on Dec. 18, refiners this year had been willing to pay an average premium of about $5 a barrel for Brent crude, the international benchmark, over the price of West Texas Intermediate oil, according to data compiled by Bloomberg.
Since the prohibition ended, that premium has disappeared; West Texas Intermediate, the benchmark by which prices for other types of North American are set, commanded 11 cents more per barrel than Brent on Wednesday.
ConocoPhillips is the largest U.S. oil explorer by market value that doesn’t also own refineries and chemical plants.