U.S. OIL EXPORT SURGE STEALS MORE OPEC SHARE

Some analysts say the gasoline glut of February now appears to be clearing and could be setting up for strong demand in April. That means refinery demand for crude will also rise.

"I'm pretty confident we're going to get a run higher in crude and we're going to get a run higher in gasoline. April is going to set the tone in the second quarter," said Tom Kloza, global head of energy analysis at Oil Price Information Service. Kloza said prices of both should rise as demand goes higher.

Kloza said April typically sees a lift in gasoline demand over March, and on average it's been about 100,000 barrels a day during the past 10 years. But last April, demand ran counter the normal trend and actually fell.

"I think when you look at vehicle miles traveled and you look at car sales, we had a funky start to the year," said Kloza. "I think April will see considerably higher demand than March, if you throw in the wild card of exports as well as imports, you have enough tinder there to spark an increase in gasoline prices," he said.

Last week's bump in exports comes as the U.S. also lowered the amount of crude it imported. The U.S. bought 7.2 million foreign barrels a day, mostly from Canada. Those imports are just about the same level as the four-week average but down from the prior week's 7.8 million barrels a day. The U.S. also produced 9.1 million barrels a day, a recent high.

"The bottom line is imports edging lower and exports edging higher. That's all positive for crude, not to mention crude runs," said Michael Wittner, global head of oil research, at Societe Generale. "This is what's going to turn the U.S. crude stocks situation around. Net imports and crude runs going up. ... Imports on their own should be edging down and exports should be increasing. Put the two together. I think it's pretty positive. It's constructive."

Kilduff said he was skeptical that the U.S. market is really swinging toward rebalancing. "Certainly if it keeps up at this pace, you would think it would help the balance. But we were up again in the lower 48 states in terms of production," he said.

OPEC has said there are signs of rebalancing elsewhere in the world, but that the market is heavily focused on U.S. data, which shows a stubborn glut.

"There are signs elsewhere that some inventories are getting liquidated, like for storage in South Africa, we're seeing oil come out. We don't see floating storage of crude oil in the North Sea so there are some signs that things may be getting better for OPEC," Lipow said.

Restrictions on U.S. oil exports were removed in late 2015, when very few exports were allowed but most went to Canada. In 2015, 92 percent of U.S. exports went to Canada, but in 2016, just 58 percent went to Canada, though it was still the largest export market for crude.

The U.S. exported oil to 26 different countries in 2016, up from 10 the year earlier. According to government data, oil went to European destinations such as the Netherlands, Italy, the United Kingdom and France. Curacao was the second-largest destination and China was the third.