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Crude Oil Exports Drive Trade Data

David Becker
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Crude oil prices moved higher on Friday, on the heels of a stronger than expected employment report, released by the Bureau of Labor Statistics. The volume of oil that is produced in the US, combined with the production of distillate and gasoline could be a substantial boost to the US balance of trade.

Gross exports of petroleum products from the United States reached 4.3 million barrels per day in December 2013, the first time exports exceeded 4 million barrels per day in a single month. December exports cap a year of steady growth and bring average exports for full-year 2013 to 3.5 million barrels per, slightly more than 10% higher than in 2012. The increase in exports was broad-based, affecting multiple products. Average distillate fuel gross exports exceeded 1.1 million barrels in 2013, a 110,000- barrel per day increase over the 2012 level.

Currently crude oil exports from the US are not allowed, but BP seems to have found a way around this issue. They have contracted with Kinder Morgan (NYSE:KMI) to purchase all of the slightly refined oil at a mini-refinery owned by KMI which will allow BP to start exporting this product.

Oil prices experienced a rocky ride during the past week. Initially they were buoyed by the unrest in Ukraine but seemed to fall back after Putin pulled back his troops after a military exercise. Prices seem to gain traction after the Labor Department released its non-farm payroll report on Friday.

The Labor Department reported that U.S. nonfarm payrolls increased by 175,000 in February, compared to the 139,000 expected by economists. Weak employment data released earlier in the week had many economists revising down their expectations. Revisions by the agency showed the economy added slightly more jobs in recent months than previously believed. Employers added 129,000 jobs in January, up from 113,000 and 84,000 jobs in December, up from 75,000.

WTI prices pushed higher but faced resistance near the 10-day moving average at 102.60. Momentum is negative as the MACD (moving average convergence divergence) index generated a sell signal were the spread (the 12-day moving average minus the 26-day moving average) crossed below the 9-day moving average of the spread. The RSI (relative strength index) is printing near 57, which is in the middle of the neutral range.

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