By Valerie Volcovici and Catherine Ngai

Dec 23 (Reuters) – U.S. power group Enterprise and oil dealer Vitol raced to use the top of a 40-year ban on most U.S. crude exports, the primary of many companies desperate to “stress test” final week’s historic opening.

Despite a sudden change in world oil market circumstances that many oil merchants say has eradicated the financial benefit of transport home crude far overseas, some corporations which have lengthy lobbied for the change in coverage could also be keen to point out that their effort was not in useless, in keeping with some consultants.

Houston-based pipeline group Enterprise Products Partners LP mentioned in an announcement it would present pipeline and marine terminal providers to load a 600,000-barrel cargo of home gentle crude oil scheduled for the primary week of January.

An Enterprise spokesman mentioned that the cargo belongs to Vitol, which can determine on a supply vacation spot. A spokeswoman for Vitol couldn’t instantly be reached for touch upon the place the oil was going. The firm didn’t present any particulars on the pricing of the cargo.

“We are excited to announce our first contract to export U.S. crude oil, which to our knowledge may be the first export cargo of U.S. crude oil from the Gulf Coast in almost 40 years,” mentioned A.J. “Jim” Teague, chief working officer of Enterprise.

Some oil merchants expressed shock on the information, saying that with the U.S. crude futures contract buying and selling constantly above Brent for the primary time because the shale period started 5 years in the past, exports of most varieties wouldn’t be economical.

Even so, others are queuing up. Pioneer Natural Resources , an impartial producer that together with Enterprise obtained the inexperienced gentle from the U.S. authorities final 12 months to ship a flippantly processed type of ultra-light crude to check the ban, expects to start exports by mid-2016, it mentioned in an announcement.

“The company has been actively working with its midstream partners to secure export facilities along the U.S. Gulf Coast, which will maximize the company’s crude marketing flexibility going forward,” the assertion mentioned, including that Europe, Asia and Latin America are potential markets for U.S. crude.

ABRUPT END

On Friday, Congress handed and President Barack Obama signed into legislation a $1.8 trillion authorities spending and tax aid invoice that included repealing the four-decade-old export ban, which barred shipments to international locations aside from Canada. The Department of Commerce issued an official discover on Tuesday saying corporations now not want to use for licenses to export crude.

In the approaching weeks, corporations are more likely to “stress test” the place export alternatives will probably be, mentioned George Baker, government director of the Producers for American Crude Oil Exports, which led the profitable lobbying effort in Washington to raise the ban.

Pressure from oil producers to scrap the restrictions intensified over latest years, as U.S. crude oil costs plunged to as a lot as $25 a barrel under world costs as a consequence of a build-up of swelling U.S. shale manufacturing brought on by infrastructure bottlenecks in addition to the export ban.

But that hole has vanished in latest weeks amid rising proof that U.S. manufacturing has shifted into reverse this 12 months as plummeting costs prompted drilling to dry up, whereas output abroad remains to be swelling, with Iran poised to extend gross sales as sanctions are lifted subsequent 12 months.

On Wednesday, U.S. oil futures have been buying and selling at a premium to world Brent all the best way to June.

Jacob Dweck, an legal professional with legislation agency Sutherland that represents oil producers, mentioned some producers and shippers “are interested in flying the flag of exports … They want to create the new reality of exports.”

But analysts mentioned even when a handful of corporations announce offers in coming weeks, it doesn’t sign an even bigger pattern.

“It’s universally agreed in the short term that we won’t see a flood of ships leaving for foreign ports because the economics aren’t right,” mentioned Sandy Fielden, director of power analytics at RBN Energy. (Reporting by Valerie Volcovici in Washington and Catherine Ngai in Toronto; extra reporting by Liz Hampton in Houston, Timothy Gardner in Washington and Amrutha Gayathri in Bengaluru; Editing by Jonathan Leff and Matthew Lewis)

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