US Crude Flow to Europe Slumps

US crude exports to Europe fell to an 11-month low this month as a shrinking discount and rising shipping costs squeezed demand for US barrels, according to Refinitiv Eikon data and analysts. 
The spread between US crude and Brent has narrowed sharply from above $10 per barrel in November to $6.63 on Saturday, the smallest discount for US crude since early August, Reuters reported. 
“The arbitrageur has been less workable,” said Olivier Jakob, analyst at consultancy PetroMatrix. “It is not really the period to take a lot of crude.” 
Seventeen vessels carrying about 298,000 barrels per day of crude departed from Texas and Louisiana for European ports this month, the fewest since last January, with volumes down from 404,000 bpd last month, Refinitiv Eikon data shows. 
US shipments to the European refining and storage hub in Rotterdam fell by more than half from November levels to about 71,000 barrels per day, as crude inventories slumped ahead of end-of-year taxes on crude held in storage. 
Freight costs for oil tankers have climbed as producers bid up tanker rates. Some of the tankers were used for floating storage by Iran. 
European demand for US crude also was squeezed by high premiums for US Gulf Coast grades, one ship broker said. West Texas Intermediate at East Houston, also known as MEH, traded around a $5 premium to US benchmark crude earlier this week.