Terminal reports sharp rebound in LOOP Sour cavern exports for June

The Louisiana Offshore Oil Port delivered more than 1.1 million barrels of the blended crude LOOP Sour ex-cavern in June, more than double the amount it delivered in May, the oil terminal said Monday.

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.

Last month, about 37,000 b/d of LOOP Sour were exported from the cavern. That compares with both a 2018 and the 12-month average of 49,000 b/d. It also represents a sharp rebound from May, when about 500,000 barrels of LOOP Sour were delivered from the cavern. That was the lowest monthly total since one year earlier, when no LOOP Sour was exported from the cavern.

The record-high was April, when more than 3.2 million barrels, or 107,000 b/d, were delivered ex-cavern.

In related news, LOOP and Matrix Markets will host Tuesday their monthly storage futures auction for LOOP Sour capacity allocation contracts, Matrix Markets said last week. The companies will auction 11,900 CACs worth the equivalent of 11.9 million barrels of storage. The front-month of August will see 2,250 CACs put up for sale while the most for any contract will be in Q4 2018, where 4,800 CACs will be auctioned.

The 11,900 CACs to be auctioned represent the largest amount to be offered in one auction since April 2015, which was just the second storage futures auction held by the companies. Over the past year, LOOP has typically offered just shy of 9,000 CACs. The value of those CACs has traded between 5-8 cents/b since December 2017, when the minimum bid was lowered to 5 cents/b.

Market participants do not appear interested in paying up to store crude, particularly in a backwardated market. It is worth noting that the backwardation lately has increased.