Crude imports fall amid wider Dubai, Brent premiums over WTI: In the LOOP

The Louisiana Offshore Oil Port has seen a month-on-month decline in crude imports, impacted by persistently wide Brent/WTI and Dubai/WTI spreads that have pushed up the price of foreign grades.

For the first half of October, LOOP imported 4.585 million barrels of crude, according to Platts Analytics' Bentek Energy and the US Customs Service. This represents a month-on-month decrease of 1.643 million barrels versus imported volumes in the first half of September.

Of the crude imported in October, Iraqi Basrah Light accounts for about 2 million barrels. LOOP also brought in about 547,000 barrels of Mexican Maya, 960,000 barrels of Brazilian Jubarte, 540,000 barrels of Venezuelan Morichal, and 538,000 barrels of Venezuelan Zuata.

A widening Brent/WTI spread has discouraged imports of pricier Brent-based barrels into the US Gulf Coast, according to Platts data. For the first half of October, Brent averaged a $5.84/b premium to WTI, up 24 cents/b from the first half September value of $5.60/b.

In addition, a wider Dubai/Brent spread has discouraged imports of Dubai-based Middle Eastern barrels into the USGC. For the first half of October, Dubai averaged a $4.13/b premium to WTI, up 46 cents/b from the first half of September value of $3.67/b.

Continued OPEC production cuts, coupled with lost domestic sour crude production due to Hurricanes Harvey and Nate have tightened supply of domestic sour grades leading to higher regional prices. For the first half of October, regional sour benchmark Mars had an average differential to WTI cash of plus $2.20/b. This represents an increase of 44 cents/b from the grade's average assessed value in September.

As Mars and similar domestic grades have increased in price, regional refiners have not only been importing fewer barrels of crude, they also have been switching their slates to run proportionately more domestic sweet grades, according to an industry source. Doing so allows refiners to capitalize on higher distillate yields of sweet grades even as the regional sweet/sour spread holds steady. For the first half of October, LLS held an average premium over Mars of $3.30/b, versus an average premium of $3.31/b for September.

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 by searching for 'Platts LOOP' in your app store.