USGC blended crude LOOP Sour gets second full assay treatment: In the LOOP

A second detailed assay for the US Gulf Coast blended crude LOOP Sour, which the Louisiana Offshore Oil Port published Monday, shows its gravity has remained stable while its sulfur content edged lower.

The oil terminal LOOP published the assay as part of an effort to broaden the crude's appeal by showing potential non-US buyers what they could expect to receive. LOOP published the first detailed assay for LOOP Sour in September.

LOOP Sour is comprised of the US Gulf of Mexico grades Mars and Poseidon and a crude blend called Segregation 17, into which the Middle Eastern grades Arab Medium, Basrah Light and Kuwait Export Crude can be delivered.

This most-recent assay offers no surprises. The crude remains a medium sour with minor increases (metals) and decreases (acidity) in certain aspects, which is to be expected given it is a blend. Furthermore, LOOP Sour component crudes also vary in quality: a Mars assay dated November 2017 showed API gravity and sulfur at 29.5 and 1.89%, respectively, compared with 28.8 and 1.8% in a September 2012-dated assay.

LOOP typically maintains a discount to other US Gulf Coast crudes. On Monday, S&P Global Platts assessed February-delivery LOOP Sour at a 50-cent/b discount to Mars and 20 cents/b less than Poseidon; however, LOOP Sour is 5 cents/b more valuable than Southern Green Canyon, which delivers into Texas.

Both September 2017 and January 2018 assays include simulated distillation and true distillation data, which is valuable for refiners looking to maximize or minimize production of certain refined oil products.

The full assay can be found on the LOOP website at www.loopllc.com.

Some key aspects of the crude per the two assays are as follows:

RISING POPULARITY, OR REACTION TO BACKWARDATED MARKET?

LOOP has sought to broaden LOOP Sour's appeal in recent years by revealing more details about the crude and increasing the frequency it does so. Since LOOP Sour's inception in 2015, LOOP has published monthly quality reports. It launched in 2017 weekly reports on gravity and sulfur in addition to publishing the first detailed assay in September.

LOOP Sour reached its second-highest level of ex-cavern deliveries in December, totaling more than 2.1 million barrels or about 68,000 b/d, according to the terminal's data. The record-high month for ex-cavern deliveries was November 2016 at 2.186 million barrels or 73,000 b/d. December was the fourth consecutive month in which LOOP Sour deliveries rose, while 2017 deliveries in total rose 6% over 2016.

The reason for increased LOOP Sour demand could be attributed to several factors, including lower medium sour imports in the US Gulf Coast, such that refiners need to find a replacement barrel, and the crude market's shift from contango to backwardation, which is a disincentive to store crude even as LOOP Sour storage costs have fallen lately.

Basrah Light accounted for 28% of all waterborne imports at LOOP (about 113,000 b/d) in 2017 compared with 17% for Kuwait (67,000 b/d) and 8% for Arab Medium (32,000 b/d). It is important to note that not all LOOP Sour-deliverable crudes that arrive at LOOP will be delivered into the LOOP Sour cavern.

LOOP pipeline receipts of Mars and Poseidon are not available; however, Platts Analytics estimated Mars/Amberjack and Poseidon production to average  532,000 b/d in 2017.

The 'In the LOOP' Americas crude oil wrap runs each Monday in Crude Oil Marketwire, North American Crude and Products Scan and on the Platts Global Alert. You can read the FAQ: USGC LOOP Sour crude here and find the full special report LOOP Sour Crude: A benchmark for the future here. Also be sure to download our LOOP app(opens in a new tab) by searching for 'Platts LOOP' in your app store.