Oil terminal launches weekly quality report for LOOP Sour blended crude: In the LOOP

The Louisiana Offshore Oil Port launched Monday the first of what will be weekly quality reports on its medium sour blended crude LOOP Sour, a move to bring more up-to-date information to market participants that runs counter to current practices.

LOOP said Monday it will publish a rolling one-year graph containing weekly breakdowns of API gravity and sulfur for LOOP Sour deliveries ex-cavern. LOOP will continue to publish its monthly quality report, which is typically released on the first business day of the month and lists quality information for deliveries made during the prior month.

LOOP Sour is a blend of US Gulf of Mexico grades Mars and Poseidon, and a blend of Middle East crudes called Segregation 17, comprised of Arab Medium, Basrah Light and Kuwait Export Crude. It is stored in cavern at the Louisiana Offshore Oil Port terminal.

In Monday's report, LOOP said LOOP Sour's API gravity had a one-year low of 28.9 and high of 31.4, while its sulfur content spread was 2.02% and 2.96%. According to monthly reports, the average from August 2016 through July 2017 was 30.2 for API and 2.53% for sulfur.

The move to publish weekly reports is notable because regular quality reports are often rare for crudes marketed around the world. In the US Gulf Coast, stakeholders for medium sour grades Poseidon and Mars used to publish monthly assays for those grades but ultimately stopped. For Mars, majority stakeholder Shell does list an assay on its website while minority partner BP's latest assay is dated September 2012. Poseidon Oil Company's website has not had updated quality information for that grade since February 2015.

API gravity and sulfur are just two of many characteristics refiners look at when deciding what crudes to run in order to maximize or minimize production of particular refined products. Other factors include acidity, metals content, presence of asphaltenes and ultimately a distillation curve.

On Monday, LOOP Sour was heard offered at a 30 cents/b discount to one of its component grades, Mars. September LOOP Sour was assessed 5 cents/b less than Friday relative to Mars, which put it at cash WTI minus 75 cents/b or $46.84/b.

The LOOP terminal received about 8.3 million barrels of Arab Medium, Basrah Light and Kuwait crudes by water from July 1-August 10, according to Platts Analytics and US Customs data. Refiner Marathon Petroleum imported 6.1 million barrels of that amount, comprised of 3.1 million barrels of Basrah Light, 2 million barrels of Kuwait and 1.1 million barrels of Arab Medium. Valero imported a further 2.1 million barrels of Kuwait in that time; however, it can be difficult to draw conclusions from that import information because not every LOOP Sour-eligible barrel will be blended into the cavern.

As for the two domestic grades, Shell said Q2 2017 Mars production was 506,000 b/d. Recent production data for Poseidon was not immediately available; however, Platts Analytics data suggests production should average about 250,000 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.