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According to industry data, state oil companies in Mexico and Venezuela, diverted from their domestic plants, were diverted to thirsty refiners, who were penalized by transportation restrictions to obtain similar varieties from Canada.
The situation reflects an unusual set of events, such as the urgent need for liquidity from Venezuela and Mexico to pay debts and investments, as well as an unmet demand for heavy crude in the United States. United due to reduced availability of Canadian oil, According to operators and badysts.
The United States imported 1.675 million barrels of crude oil a day in August, the highest level since May 2017, according to Refinitiv Eikon data.
The recent US export boom Latina is mainly solicited by Mexico, Brazil and Venezuela, despite the long decline in crude oil pumping in most of the region. Over the last decade, oil producers – with the exception of Brazil – have reduced their deliveries, particularly to the United States.
In the case of Venezuela, the state oil company PDVSA "needs cash to pay this month to the holders of the 2020 bond to amortise ConocoPhillips (following an arbitration award ", said Robert Campbell, head of petroleum research at Energy Aspects consulting company, citing two big bills to pay in the coming days.
Since the shale oil boom in the United States, many refiners of the Gulf Coast have established their plants to process crude oil from Latin America and the Middle East, with Venezuela and Mexico being the main suppliers. This supply of foreign oil has decreased in line with the increase in the availability of local varieties, mainly badociated with Canadian oil.
However, the limited capacity of pipelines from Canada is reconfiguring the origin of imports, less in the short term.
US refineries want more Canadian crude "because it's cheap," said one operator, but "unless someone builds a new pipeline," it will be difficult to increase the imports.
US purchases of Canadian crude oil by pipeline increased to 3.6 million bpd during the week ended October 12, reaching a capacity of 98%. According to the Genscape data provider, rail shipments also reached a record 284,000 b / d, up from 85,000 b / d in October 2017.
"These pipelines are absolutely full," said Dylan White, Senior Analyst at Genscape Oil Markets. "There is no room for growth".
The strategy of increasing crude exports while importing fuel could be counterproductive for Latin American producers. Pemex is expected to increase fuel purchases if its refineries do not restart in the coming months after interruptions and unplanned maintenance. PDVSA, for its part, has few options to curb the growth of imports.
Latin America has increased its fuel purchases in the United States by 7% to 2.87 million bpd, so far this year. 2018, thanks to increased imports from Mexico, Venezuela, Chile and Peru, according to the US Energy Information Administration.
Source: Reuters
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