The light crude that was loaded in the tanker by ConocoPhillips COP and NuStar Energy LP NS was pumped from South Texas-based Eagle Ford Shale. ConocoPhillips − located in Houston, TX − is a major global exploration and production (E&P) company. NuStar Energy is a master limited partnership (MLP) that engages in the transportation and storage of crude oil as well as refined products in the U.S., the Netherlands Antilles, Canada, Mexico, and the U.K. As per NuStar, Switzerland-based crude trading player Vitol Group – which also has interests in the refineries − will purchase the crude cargo. Vitol Group is also expected to be the buyer of the second light oil cargo that may be exported from Houston this week. It is to be noted that Enterprise Products Partners LP EPD is loading the tanker, for second U.S. crude export, in Houston. The tanker will carry 600,000 barrels of the commodity. Last month, the 40-year-long U.S. crude export ban was lifted after President Barack Obama signed the legislation. The departure of the first oil tanker from the U.S. put an end to the trade halt since mid 1970. Will U.S. Crude Export impact Oil Price? The oil market is already oversupplied, resulting in weak crude prices since mid 2014. To go back further in time, during 1990 and early 2000, the U.S. was more dependent on crude import as domestic demand was far above its conventional oil supply. But with the invention of new techniques like hydraulic fracturing and horizontal drilling, U.S. shale producers ramped up oil production relentlessly. Eventually, the U.S. started relying less on oil import thanks to the huge scale of crude output. The shale boom turned the U.S. into an oil-surplus economy from a crude-deficit region. Along with the U.S., the Organization of the Petroleum Exporting Countries (OPEC) – the international cartel of oil producers – also pumped up more crude. All these events led to a global oversupply of the commodity and pushed oil to its multi-year lows. Nonetheless, export of U.S. oil when supply of the commodity is already plentiful, will likely make the market more oversupplied. So, speculation is rife that the event will actually put further downward pressure on the price of oil. Hence, we don’t expect upstream or integrated oil majors like Chevron Corp. CVX, Exxon Mobil Corp. XOM, Royal Dutch Shell plc RDS.A and BP plc BP to benefit from an oil price recovery any time soon. This is because the players will not be able to sell crude at attractive prices and their upstream business may end up being hurt again. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BP PLC (BP): Free Stock Analysis Report CHEVRON CORP (CVX): Free Stock Analysis Report ENTERPRISE PROD (EPD): Free Stock Analysis Report NUSTAR ENERGY (NS): Free Stock Analysis Report CONOCOPHILLIPS (COP): Free Stock Analysis Report ROYAL DTCH SH-A (RDS.A): Free Stock Analysis Report EXXON MOBIL CRP (XOM): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
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