Oil prices have been in a recovery rally after declining last week on a lack of oil from Libya along with the ongoing concern over the Ukraine.
In addition the U.S. market got a bit of support from comments from the U.S. Energy Secretary that exporting crude oil (NYMEX:CLM14) was under evaluation by several U.S. agencies.
As I discussed in detail in Monday’s newsletter the only way to eliminate the growing surplus of crude oil in the United States is to open up the export channel as imports are at the lowest level in years and refinery run rates are near their highs for this time of the year.
The Wall Street Journal reported on Tuesday the United States is considering relaxing regulations that ban the export of crude oil, citing growing domestic production of oil that isn't suitable for refining locally, U.S. Energy Secretary Ernest Moniz said Tuesday.
The issue of crude oil exports is under consideration…a driver for this consideration is that the nature of the oil we're producing may not be well matched to our current refinery capacity," Mr. Moniz said at a media briefing Tuesday after a two-day energy conference in Seoul. He said a study of the subject, including multiple agencies, is currently taking place.
BNSF Chairman Matt Rose has said that he expects U.S. regulators to match Canada’s plan for phasing out older tank-cars used to carry crude, according to Bloomberg. Speaking at Berkshire Hathaway’s shareholder meeting, Rose said “you’ll see those two regs harmonize”, and that it would be “craziness to have one reg different to the other reg”. Global Partners said in its Q1 earnings call that its already-announced move to ban non-CPC 1232 tank-cars from its terminals on the U.S. East and West Coast was not expected to affect throughput volumes there.