Market and product

* Distillate exports to Netherlands double

* Motiva imports record low from Saudi Arabia

* Tight WTI/Brent stymied crude exports

The US exported a record high 1.45 million b/d of distillates in June, up 207,000 b/d from May, with increases seen to Latin America and Europe, US Energy Information Administration data showed Wednesday.

Distillate exports to the Netherlands jumped 115,000 b/d to 225,000 b/d in June, while exports to France edged up 11,000 b/d to 79,000 b/d.

In Latin America, increases were seen across the board. US refiners exported 116,000 b/d of distillate to Brazil in June, up from 97,000 b/d in May. Exports to Mexico jumped 52,000 b/d to 212,000 b/d, while exports to Argentina climbed 46,000 b/d to 118,000 b/d.

US Gulf Coast refiners -- notably Marathon, Valero and Phillips 66 -- have increasingly depended on export demand to market their refined products. While sluggish economic growth has sparked concerns that export demand might begin to dry up, threatening USGC refinery margins, the EIA June data showed export demand running strong.

The market may be glutted with refined products, making the diesel arbitrage to Europe difficult, but near record low freight rates have helped keep the barrels moving.

US CRUDE IMPORTS DOWN SHARPLY

US crude oil imports fell 335,000 b/d to 7.611 million b/d in June, with imports from Canada, Iraq, Saudi Arabia and Venezuela all falling.

Imports from Canada fell 23,377 from June to 2.995 million b/d, significantly below levels seen over the first quarter of 2016 when crude imports from the country averaged 3.432 million b/d.

In May wildfires erupted around the oil sands capital of Fort McMurray, Alberta, forcing operators to shutter over 1 million b/d of output. The fires were likely reflected June data, given the several weeks it takes for oil sands crude to be transported from northern Alberta to the US border.

Phillips 66 reduced its imports from Canada significantly, bringing in 487,000 b/d, down 55,000 b/d from June. The company brought just 15,000 b/d of Canadian crude into Oklahoma in July, compared with 65,000 b/d in June, after taking a coker and an alkylation unit offline for maintenance at its 200,000 b/d Ponca City refinery on July 18.

Moving in the other direction, Marathon ramped up its imports from Canada in June by 77,000 b/d to total 268,000 b/d. The company's Canadian imports into Illinois -- where it operates 212,000 b/d Robinson refinery -- jumped 150,000 b/d.

ExxonMobil's Canadian imports dropped 12,000 b/d to 251,000 b/d, helping to drive the total figure lower.

Crude imports from Iraq fell 122,000 b/d to 434,000 b/d, EIA data showed, even as the country ramped up its crude output. Joint Organisations Data Initiative data for June showed Iraqi output up by 50,000 b/d to 4.549 million b/d. In May, US imports of Iraqi crude reached their highest level since October 2012.

MOTIVA SAUDI IMPORTS LOWEST ON RECORD

Valero, PBF Energy, Marathon and ExxonMobil all drastically reduced their imports from Iraq in June, while Chevron and Motiva imported more.

Imports from Saudi Arabia dropped 82,000 b/d to 1.088 million b/d, with Motiva -- a Saudi Aramco/Shell joint venture -- halving its imports from the country to 150,000 b/d.

Motiva's imports from Saudi Arabia are the lowest on record and follows the the two companies' March decision to sever their US refining relationship. The company increased its imports from Iraq and Colombia in order to offset the loss of Saudi barrels.

Imports from Venezuela fell 78,000 b/d to 673,000 b/d, as the Andean country's oil industry continues to show serious signs of stress.

In August, state-owned PDVSA announced that it would shutter two CDUs at its leased 335,000 b/d Isla refinery on Curacao island due to a lack of available crude to process, while the its flagship Paraguana Refining Center continues to run below 50% of its utilization rate.

US CRUDE EXPORTS FALL FROM RECORD HIGH

US crude exports fell significantly in June after rising sharply for three consecutive months, following the Congress' decision to lift export restrictions in December 2015.

US exports dropped from an all-time high of 662,000 b/d to 383,000 b/d in June, after the Brent-WTI spread collapsed in May, likely reducing the competitiveness of US crudes in Brent-linked markets.

ICE Brent's premium over WTI averaged 34 cents/b in May, compared to $1.29/b in April, 65 cents/b in March and $1.47/b in February as US crude exports surged to towards the all-time high.

Aside from 37,000 b/d to the UK, crude exports from the UK to Europe fell to zero in June. In May, the US exported 110,000 b/d to Netherlands, 24,000 b/d to Italy and 20,000 b/d.

However, since May, the Brent/WTI spread has widened, averaging 68 cents/b in June, $1.02/b in July and $1.86/b in August, potentially encouraging US exports in recent months.

US Census Bureau exports data for July is set to be released Friday.