En Español



Very usefull links



PW
Bookstore





News links

AP

AFP

Aljazeera

Dow Jones

Oil price

Reuters

Bloomberg

Views and News
from
Norway

 

 

 

 

PEMEX looking to export Maya Crude to U.S. West Coast


Cargoes would be first in eight years amid Asian competition

RIO DE JANEIRO
Petroleumworld.com 10 12 2016

Mexico is targeting U.S. West Coast refineries to boost sales of its flagship Maya crude amid a global oil glut.

While Mexico has been a regular supplier of Maya oil to U.S. Gulf Coast refineries, it hasn't shipped any to the West Coast since February 2008, according to data from the U.S. Energy Information Administration. California refineries such as Valero Energy Corp.'s Benicia, Chevron Corp.'s El Segundo and Phillips 66 used to be big buyers of the grade.

Petroleos Mexicanos, the state-controlled oil producer, took the first step in making Maya exports to the West Coast a reality Tuesday by issuing an official price for November sales. Earlier in the day, Pemex said on its official Twitter account that it was planning to resume shipments to the region.

“With stronger margins in the U.S., Pemex's move to restart Maya exports to the West Coast allows the company to capture a higher value for the crude compared to Europe and Asia,” Ixchel Castro, a senior analyst for Latin American oils and refining markets at Wood Mackenzie in Mexico City, said in an e-mail. The exports halted at a time when margins in Asia were stronger, she said.

The company's oil trading arm, known as PMI, set the differential to sell Maya into the West Coast at $3.70 a barrel below the price of a basket of crudes and fuel oil prices for the region. The differential, known as the K factor, compares with minus $12.65 a barrel in January 2008, the last one issued, according to data compiled by Bloomberg.

The official selling price for different parts of the world is determined using a regional basket of oils as a benchmark. Maya's discount to the Asian basket is $10.80 for November.

Increased Competition

“Mexico is facing increasing competition in Asia from rising production in places like Saudi Arabia and Iran,” Gurpal Dosanjh, a Bloomberg Intelligence analyst said in an interview Tuesday. “With a big refinery maintenance season coming up on the U.S. Gulf Coast, it makes sense for them to try to pursue the West Coast once again.”

Pemex is looking for new destinations for its crude as exports rose to 1.26 million barrels of oil daily in August, the highest in 10 months, according to data from the Mexico Energy Information Agency. Shipments increased as low refinery utilization rates freed more supplies for international markets, John Galante, a senior analyst at Boston-based ESAI Energy, said in a telephone interview. Refinery utilization rates at Pemex's six refineries slid to 51 percent in August. That compares with an 88.3 percent U.S. utilization rate Sept. 30.

Pemex has yet to determine when the first cargo will be sent or the amount of crude, according to a spokesman who asked not to be identified in accordance with the company's policy. The move will allow Pemex to expand and diversify its client base, he said. Pemex isn't currently considering expanding Maya exports to Asia, he said. 

Though part of the U.S., the West Coast is seen as a market that is very different from the Gulf Coast. It mainly attracts barrels from Alaska, Saudi Arabia , Canada and Ecuador that travel the Pacific Ocean. Maya can compete with Saudi crude given Mexico's proximity to the U.S., but very few shipments are likely to head north, Mara Roberts, a New York-based analyst at BMI Research, said in an e-mail.

“The last time Mexican exports were sent to the West Coast, it was a bit erratic and before that, volumes were quite low,” she said. “I think Maya crude is highly unlikely to squeeze out Canadian or Saudi shipments altogether, but rather carve out a small piece of the West Coast pie for itself.”




Story by Lucia Kassai and Amy Stillman from Bloomberg.

bloomberg.com | 10 11 2016

Copyright© 1999-2016 Petroleumworld or respective author or news agency. All rights reserved.

We welcome the use of Petroleumworld™ (PW) stories by anyone provided it mentions Petroleumworld.com as the source.

Other stories you have to get authorization by its authors. Internet web links to http://www.petroleumworld.com are appreciated.

Petroleumworld welcomes your feedback and comments, share your thoughts on this article, your feedback is important to us!

We invite all our readers to share with us
their views and comments about this article
.
Write to editor@petroleumworld.com


By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels

 

 

 

 

TOP

Contact: editor@petroleumworld.com,

Editor & Publisher:P.Ohep F. /Producer - Publisher:P.Ohep F./
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2016, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2016, Petroleumworld ™  / Elio Ohep Fitzgerald- All rights reservedThis site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.