US west coast economics weigh on Oriente prices
OREANDA-NEWS. August 14, 2015. Lower prices for Alaskan North Slope (ANS) delivered to the US west coast and widening spread between US benchmark West Texas Intermediate (WTI) and international benchmark Ice Brent is weighing on Ecuadorean Oriente crude.
Oriente is valued today at a \\$4/bl discount to November WTI, or more than \\$10/bl below November Ice Brent as the WTI trades about \\$6/bl below Ice Brent. Last week, the medium sour crude was valuedat a discount to WTI of about \\$3/bl, which translated to a \\$7.95/bl discount to Ice Brent.
ANS, which often competes with Oriente at the US west coast, traded yesterday at a \\$5/bl premium to CMA Nymex WTI or at an equivalent discount to CMA Ice Brent of almost \\$1/bl after tradingat an average discount of 40?/bl the month prior.
The arbitrage for foreign crudes to the US west coast has deteriorated amid lower crude demand driven by refinery maintenance season. A fluid catalytic cracking (FCC) unit at ExxonMobil's 250,000 b/d refinery in Torrance, California, remains offline after the equipment was badly damaged in a February explosion. The refiner also shut other units 13 May for planned maintenance related to the FCC.
Tesoro confirmed earlier this week that maintenance is underway at its 363,000 b/d Los Angeles refining complex, and Valero was investigating the cause of flaring late last week at its 170,000 b/d refinery in Benicia.
More Ecuadorean crude is being exported in the spot market, which could weigh on prices. PetroEcuador's 110,000 b/d Esmeraldas refinery is still running at only partial capacity during an extended turnaround, decreasing the country's domestic crude consumption.
The refinery is scheduled to resume normal operations in November, the Ecuadorean state-owned company recently said.
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