The slow pace that oil and gas is exploring the intriguing potential of Blockchain makes one wonder just how real the promise is. It’s very real, as evidenced by a recent field trial in Europe. Duration: 9m 47s
The strong upturn in international steel prices since late 2016 has somewhat clouded over the fundamental problems that continue to hamper the industry, including overcapacity.
Recent Chinese capacity closures have been well chronicled. However, few have noted the reality that global steel production actually expanded in 2017.
Before the latest upturn, steelmakers failed to use the previous downturn to clear away unviable businesses and leave a healthier industry. It seems a number of companies chose to navigate the tough times by simply avoiding the closure of outdated or unnecessary capacity.
And these rescues could act as a drag on the sector going forward.
While many historical heavyweights have disappeared over the years — remember Carnegie Steel, Bethlehem Steel or Corus? — numerous “zombie companies” have managed to cling on, attracting multiple rescue bids and takeovers.
Following years of limited merger and acquisition activity, companies now appear flush with cash and willing to spend once more. Price increases have bolstered steel producers’ margins, while low interest rates and a recovering banking sector have made borrowing to invest cheaper and more accessible.
The stricken state of many companies following the 2007-2008 crash also meant a number of assets were available on the cheap.
But while some assets can be turned around, it can be an expensive and high-risk strategy. And the business case for some can easily be questioned.
In the recent past, Russia’s Mechel invested heavily in European assets before losing money and withdrawing to the safety of its domestic market. US Steel made its own overseas retreat, having exited its Serbian business in January 2012, while chatter continues to circulate regarding an imminent offloading of its Slovakian works.
Established brands like Germany’s ThyssenKrupp now appear to be looking for ways out of the steel industry, preferring to focus on higher-margin endeavors. But where old money is leaving, new money is entering.
The most active new player has been Liberty Steel. A group that until recent years was known mostly as a trading house has since gobbled up a number of bankrupt assets across the UK before going on to rescue the bankrupt Arrium assets in Australia.
Most recently, Liberty announced plans to increase its presence in the US, having acquired a wire rod mill from ArcelorMittal. The facility has been a perennial loss-maker, with the local government itself seemingly unconvinced of its viability and looking at one time to redevelop the site.
In India, debt-laden Essar Steel and Bhushan Steel Ltd are subject to bids from a number of major domestic producers. One of those, JSW Steel, is also seeking an entry into the European market, having expressed interest in Italian longs producer Aferpi.
JSW previously sought the Ilva assets now being acquired by ArcelorMittal. Ilva had been kept going by Italian state aid before ArcelorMittal launched its bid. Major investments still are needed to address environmental concerns there.
And China’s Hebei I&S (Hegang) has also started looking to invest abroad, including pumping hundreds of millions of dollars into US Steel’s former Serbia site.
Expansion through acquisition can be successful and address the fragmented nature of the global industry — one of the reasons why steel prices have been so volatile and overcapacity is such an ongoing problem.
Arguably, ArcelorMittal has now steadied the ship and made a success of its massive expansion a decade ago. In the US, current Secretary of Commerce Wilbur Ross profited hugely from rescuing stricken steel assets and selling them to ArcelorMittal.
But there are lessons to be learned from recent history, as well.
Buoyed by economic strength and growth in Thailand’s car industry, flat steel re-roller Sahaviriya Steel Industries (SSI) acquired Teesside Cast Products in 2010 in a $500 million deal that was part of its bid to vertically integrate.
Producing slabs in the UK, one of the most expensive regions to make steel, and shipping it to Thailand for rolling appeared a forlorn plan to many industry pundits at the time. And a subsequent crash in steel prices led to the mothballing and liquidation of the plant in 2015.
As new capacity is brought online with modern equipment upgrades in China, Southeast Asia and the Middle East, older assets become capital-intensive investments as they need to upgrade to keep up.
If mills fail to remain competitive, such investments can quickly become ill-fated when — inevitably — that next market downturn arrives.
After an active December, Japanese buyers — including power generators and industrial end-users — have yet to launch any tenders for Australian thermal coal spot cargoes this month.
“There are no tenders from Japan,” one market source said, adding that this is likely to remain the case for the entire month.
In previous years, Japanese buyers have issued many tenders in January and February for spot shipments of Australian thermal coal.
They had done so in order to determine the strength of offer prices from Australian coal producers in the lead up to annual price negotiations for cargo deliveries of 6,322 kcal/kg GAR thermal coal under term contracts for the Japanese financial year starting April 1.
This year, however, it’s different for two reasons.
Firstly, sources said January’s price-testing exercise has lost its relevance as Australian coal producers’ responses to previous January tenders have been poor, with very few offers forthcoming.
Without seeing offer prices from Australian thermal coal shippers and testing them in a competitive tendering process, Japanese buyers have been unable to use tenders for transparency in the prevailing market value of the fuel.
A second reason for the paucity of Japanese tenders this month is the persistently high price of Newcastle 6,000 kcal/kg NAR thermal coal, the spot-traded version of 6,322 kcal/kg GAR coal and the traditional feedstock for Japanese power plants.
This grade of Australian thermal coal has traded above $90/mt FOB Newcastle since mid-July 2017, according to S&P Global Platts prices.
High spot prices are holding cost-conscious Japanese thermal coal consumers back. Consequently, they have opted for extra volumes above their regular deliveries from term contracts at lower locked-in prices.
With activity low in the spot market for Newcastle 6,000 kcal/kg NAR thermal coal, it is difficult for market participants to discover authentic prices for this grade.
S&P Global Platts has presented a solution to this price discovery problem in its Northeast Asia Thermal Coal index, a daily price assessment for Japan, South Korea and Taiwan that was launched in January 2017 and is based on a specification of 5,750 kcal/kg NAR and 15% ash.
The NEAT index is derived from spot prices for Newcastle 5,500 kcal/kg NAR thermal coal, which is a more liquid market than that of Newcastle 6,000 kcal/kg NAR coal, and includes indicative Panamax vessel freight to reflect the landed cost of Australian shipments for Japan and South Korea.
The NEAT coal index touched a new high at the close of Asia trade Wednesday of $102.85/mt CFR Kinuura, Japan, and its lowest price to date was $75.40/mt in early June 2017.
APRIL PRICE TALKS
The price negotiations for the upcoming Japanese term contracts, which are effective from April 1, are set to begin in early February when Australian coal producers’ marketing and sales teams visit Japan-based buyers to give their view on the market for the year ahead, and to explain their production plans in detail.
Japanese power utilities last year agreed to a headline price of $84.97/mt FOB Newcastle for the Japanese financial year April 2017-March 2018. This has been the highest annual contract price since $95/mt FOB Newcastle in April 2013.
Another market source said that it was possible that April’s benchmark price for Japanese supply contracts could emerge at more than $100/mt FOB Newcastle, given the current market conditions.
An outcome at this level would be the highest price for Japanese April-year contracts since 2012 when it was concluded at $115.25/mt FOB Newcastle.
This source also said that if the price is concluded at $100/mt FOB for Newcastle thermal coal, it will be a “sweet spot” for incumbent producers as it will provide them with a good income but at the same time, the price will not be high enough to attract new entrants to the industry.
The post Lack of Japan spot tenders for Australian thermal coal highlights price transparency issue appeared first on The Barrel Blog.
Many of the digital innovations I’ve reviewed struggle to get to a customer trial. Why is that and what can be done about it? Stuck in First Gear Over the past 2 years, I’ve had occasion to be exposed to a number of great business...
Blockchain, the distributed ledger technology which was possibly the hottest tech topic in the energy sector in 2017, has still to prove itself as more than hype in the oil sector.
While electricity companies and grid operators see huge potential in digitalization in general and blockchain in particular to make power stations and grids more
“We are not abandoning technology efficiencies we’re developing on current platforms,” BP’s head of strategy for IST, Mike Leonard, told the S&P Global Platts Digital Commodities Summit in London in November.
“We’re seeing this as complementary…We don’t have all our eggs in blockchain, but nor do we want to avoid the topic or not take part in it,” he said. “But the more we [talk about blockchain within the company, the more] we’re finding new opportunities to explore different areas of our current technology, which is also exciting, so we may find this emerges for BP specifically in different ways than we expect.”
BP is testing the blockchain concept. It signed up in November to a consortium with fellow oil and gas companies Shell and Statoil, trading houses Gunvor, Koch Supply & Trading and Mercuria, plus banks ABN Amro, ING and Societe Generale, to co-develop a blockchain-based digital platform for trading energy commodities. The platform is to be designed and stress-tested by its investors, but run independently.
“This is about reliability and reducing costs. Many of our back office functions appear not to have changed since 1985. We’re after bottom line savings, but also how this can free up resource elsewhere in the business,” Leonard told the summit. The aim is to move away from cumbersome paper contracts to the authenticated transfer of electronic smart documents.
Leonard declined to speculate on when the first cargo of Forties crude was likely to be cleared through this platform, which is planned to be up and running by end-2018.
The consortium’s long-term aim is to migrate all forms of energy transaction data to the blockchain platform. The next step is to address inefficiencies in cash flow, as faster cash and clearing cycles mean more opportunities to do business.
HOW BLOCKCHAIN WORKS
Blockchain emerged in 2008 as the distributed, decentralized digital ledger underpinning cryptocurrency Bitcoin, recording transactions in an immutable way.
In reality it works like this: an individual (or a machine) registers as a member of a blockchain, which can be public, like Bitcoin, or private, for example like a street of householders or a group of traders. The individual/machine receives an online wallet that can be charged up with a digital currency. The individual/machine can then transact with other members registered to the blockchain.
The blockchain’s network of registered computers continually validates the transactions, building blocks of transactions that are then permanently entered in the ledger. Nobody can change the ledger, it is immutable. It is shared with all members at all times – it is not stored in one place, there is full transparency and, if the blockchain is public, anyone on the internet can view it.
Since transactions are cleared instantaneously using the chosen digital currency, there is no settlement risk. Nor is there any paperwork or middleman fees beyond set up and running costs associated with relatively simple computing.
In a key development step for energy, automated code-based processes, known as smart contracts, can interact with and update the database. This application can be used to provide an automated transaction model with no or limited third-party intermediaries, compared with the traditional transaction model involving a provider, network operator and consumer.
Blockchain’s ability to track the flow of electrons on a distributed grid, for example, enables their secure and transparent trade between consumers (or machines) directly. A practical example of this is European utility Innogy and startup Slock.it’s prototype electric vehicle charging system, Share&Charge, which enables registered users to make micropayments via a smartphone app.
The shipping industry has also started finding ways to make use of the technology to simplify its processes. Container line Maersk, one of the world’s largest shipping companies, is in the process of developing a blockchain initiative with IBM to allow a better flow of information through its systems.
In research from 2014 the companies identified more than 30 personnel and companies— and more than 200 interactions between them—involved in a typical shipment of avocados from Kenya to the Netherlands. Maersk and IBM’s system is designed to guarantee the validity of each transaction while maintaining their privacy.
In short, for energy, for shipping, for agriculture, for all transactional proceedings that lend themselves to digitalization, the technology offers huge potential to cut costs, reduce security risk and eliminate error. And, in the energy sector, the first prototypes are underway—in decentralized networks and in commodity trading.
Three of BP’s blockchain consortium partners, ING, Societe Generale and Mercuria, carried out a test of a live oil trade between parties with Mercuria at the start of this year. The successful experiment involved a shipment of African crude, which was sold three times on its way to China, and included traders, banks as well as an agent and an inspector, all performing their role in the transaction directly on the prototype Easy Trading Connect blockchain platform, Mercuria said in February.
And in March, banking group Natixis, IBM and Trafigura pioneered the first blockchain trade for US crude oil. They used a distributed ledger platform, built on the Linux Foundation open source Hyperledger Fabric, which they said was designed to be adopted at scale across the entire crude oil trading industry.
European electricity and gas companies have also tested pilot blockchain trading projects. In June, BP and Italy’s Eni completed a pilot program for processing European gas trades using blockchain technology developed by Canada’s BTL Group. This focused on gas trade confirmations, and the plan is to look at expanding it to other back office processes, including netting and generating invoices.
In May, over 20 European energy trading firms joined forces to develop peer-to-peer blockchain-based trading using Hamburg-based IT company Ponton’s Enerchain framework. In October, E.ON and Enel completed a first power trade using the system.
Agriculture had an even earlier pilot, with a wheat trade in Australia settled through blockchain back in December 2016. The deal was “auto-executed” by a smart contract run by commodity management platform AgriDigital, which also has high hopes of expanding into other commodities.
CRITICAL MASS CHALLENGE
Achieving critical mass is a common theme in all the pilot platform developers, including the energy commodity trading consortium involving BP, Shell and Statoil, which plans to open its platform to all commodities eventually, pending approvals. “It only works if there is widespread adoption,” consortium spokeswoman Carolien van der Giessen told S&P Global Platts in November.
High Halford-Thompson, CIO of the BTL Group working with BP, Eni and others on the platform to automate gas trading processes, agrees. “The challenge is getting a large enough synchronized group to shift volume onto a new settlement standard,” he told the Platts summit. “You need that critical mass to…drive the rest of the industry to move across.”
If commodities traders do move en masse to decentralized blockchain platforms, that could reduce liquidity on established, traditional platforms – like exchanges.
European energy exchange trade body Europex has warned that decentralized platforms are “dangerous” for wholesale electricity and gas markets, for example, arguing that lots of small set-ups could fragment and distort price signals. This would go against the prevailing EU policy to promote strong wholesale price signals, for example.
For now, though, regulators are more interested than concerned.
Blockchain’s impact on traded markets is still too small to need specific rules, according to EU financial authority ESMA, for example. Regulators are following developments, and the approach is pragmatic. “If you see a problem with the regulatory framework, tell your local regulator,” Clemens Wagner-Bruschek from Austrian energy regulator E-Control told the Platts summit.
Regulators are also interested in how blockchain can streamline regulatory requirements, such as post-trade reporting, but data standards would have to be harmonized first to get real benefits. Meanwhile, the EU’s executive body, the European Commission, is spending €500,000 to set up an EU Blockchain
All of which means blockchain will continue to be high profile in 2018, but the critical mass needed for it to transform energy trading, and potentially regulation, is likely to take several years more—if it comes at all.
Monday’s release by China’s Ministry of Industry and Information Technology of revised steel capacity replacement measures has sparked market debate about MIIT’s real intentions regarding electric arc furnaces.
Some pundits Tuesday were adamant the new rules encourage the replacement of converters with EAFs and would result in net EAF steel capacity expanding.
MIIT’s revised measures, published on Monday, were based on directives issued in early 2015. According to the revised version, steelmakers intending to replace their existing converters with EAFs would be permitted to carry out the replacement at a ratio of 1:1 of existing capacity versus new capacity.
Second, MIIT has reset its capacity conversion table used for calculating converter and EAF capacity, decreeing that converters or EAFs producing either ordinary carbon steel or special steel be afforded the same value regarding replacement capacity.
For example, in MIIT’s previous capacity table the productive capacity of a 100 mt converter was approximated at 1.3 million mt/year for ordinary carbon steel and 1 million mt/y for special steel. The capacity of a 100mt EAF used to be 1 million mt/y for carbon and 700,000 mt/y for special steel. Under Monday’s revision, the capacity is 1.15 million mt/year for the converter and 750,000 mt/y for EAF, either producing carbon steel or special steel.
What sparked the debate Tuesday was the clause that the 750,000 mt/y capacity standard for the 100mt EAF assumes the furnace’s melt consists entirely of ferrous scrap.
Some market sources pointed out that under the new rules, a steelmaker wanting to install a new 100mt EAF would only need to phase out 750,000 mt/y of existing crude steel capacity. However, by adding hot pig iron the EAF would be able to produce close to 1 million mt/y of crude steel. This means the EAF steel capacity at this mill is actually increased by 250,000 mt/y.
Other market watchers dismissed this, arguing the new measures actually blocked this loophole by ruling that with the shutdown of converters, all ancillary facilities which supported the converter operation – the assorted sintering, coking furnaces and blast furnaces – should be eliminated at the same time.
This being the case, there would be no blast furnaces in operation to supply hot metal to the newly built EAF. Thus the mill operators would in theory have no choice but to rely totally on scrap for the EAF and be unable boost its production above the capacity figure set by MIIT.
But one industry source questioned this theory, arguing that steel mills could just phase out part of their blast furnace and converter capacity for the installation of EAFs – several tier 1 and tier 2 steelmakers host both technologies – and could secure hot metal for the latter from their remaining blast furnaces.
Moreover, steel mills could always purchase some capacity elimination quota outside of their own steelworks, and thus keep all of their existing iron and steel making facilities in operation.
The source said the revised steel capacity replacement measures had tightened rules for all other kinds of replacements, but obviously were encouraging steel mills to switch from iron and steel making employing blast furnaces and converters to use of EAFs.
The post China encouraging electric arc furnace capacity expansion? appeared first on The Barrel Blog.
Cloud computing is poised to make a big impact on oil and gas. Here’s my weather forecast for cloud – conditions are exceptional. Duration: 9m 59s
The post 44 – Cloud Computing Has Sunny Future In Oil and Gas appeared first on Digital Oil and Gas.
It is not uncommon for people in various commodity sectors to believe that their markets exist in some kind of a happy bubble, where only the obvious supply and demand forces or targeted regulations can make or ruin their day. This often applies to the world of coal too.
Shipping is a perfect example of a factor which is sometimes overlooked. This is evident from industry events these days, where shipping is often either way down the agenda or off it completely.
The issue here is not ignorance, of course. When it comes to seaborne coal cargoes, any trader worth his salt would still look at the freight element as it affects the CIF price and delivery time.
The real problem is that freight rates have been depressed and often lacking volatility for years due to an oversupply of vessels.
With freight rates low, existing arbitrages settled safely and shipping while always there naturally was no longer perceived to be a crucial factor in opening or closing trade routes.
However, times are changing. In addition to freight already being on a path for recovery due to rising demand, there is an upcoming disruptive regulation from the International Maritime Organization that could upset the apple cart.
The global sulfur cap of 0.5% on marine fuels that that will come into effect on January 1, 2020 is already seen as a perfect storm by the oil and shipping industries as it may cause extreme volatility in bunker prices.
The most likely outcome is a sharp rise in costs for shipowners, and — as in any business — these costs will be passed on to the customer. For anyone involved in seaborne coal trade, this would mean dealing with a dramatic, long-term increase in freight rates.
No easy way out
The new sulfur cap of 0.5% is a sharp drop from the current limit of 3.5% and in simple terms it means that come January 2020, all vessels around the globe will have to burn cleaner and more expensive fuels or take other costly measures to comply.
One way that shipowners could go is using special fuel oil blends, which would fall below the 0.5% cap. However, experts are doubtful that the global refining industry will be able to supply these in sufficient volume and variety in time for 2020.
Otherwise the industry could go straight to burning marine gasoil which many expect will be the most popular option, at least at first.
However, while MGO is compliant and more readily available, it also much more expensive than conventional IFO 380 bunker fuel.
Of course, there are a few alternatives available to shipowners, such as LNG bunkering or exhaust control systems, also known as scrubbers, but both have serious drawbacks.
For example, it takes $3 million-$6 million to install a scrubber on a dry bulk vessel, with costs depending on the size of the ship and the type of the scrubber.
Retrofitting a 5-10 year old ship, given current vessels prices, would therefore be prohibitively expensive.
It is even harder to justify LNG as the global bunkering solution as the infrastructure required to support it is not there yet and the upfront costs for retrofitting ships are even higher.
Who will pick up the bill?
Whichever way the industry moves, one thing is certain — it won’t be cheap. Estimates of how much the extra costs for shipping would be vary widely, ranging from modest a $5 billion to $70 billion a year, which clearly shows how much uncertainty surrounds the whole issue.
This is not just a problem for the shipping industry. Given the sorry state of the freight market, shipowners will not be willing or able to absorb such massive extra costs themselves and will have to pass on the lion’s share to their customers.
This would be people who trade the actual commodity, and the extra bunker fuel bill could be quite substantial, especially on long-haul voyages.
Let us look at a specific example — the coal arbitrage from Colombia to North East Asia. Obviously Columbia is not the biggest player when it comes to this region. Australia and Russia are as they are much closer to the buyers.
However, in both 2016 and 2017, Colombia successfully took a considerable bite out of their market share, selling over 3 million mt a year of bituminous thermal coal to NE Asia.
The graph below compares Australian and Colombian coal prices, including Panamax freight to NE Asia. For the sake of simplicity it is assumed that freight rates on both routes were constant throughout the year.
It is quite clear that there have been pockets of arbitrage from Colombia throughout the year, when the delivered price of their product was more competitive than Australian coal.
This was made possible by the lack of volatility in the depressed dry bulk freight market, and relatively low bunker prices, which allowed a distant supplier to be competitive.
The picture is likely to be very different on in 2020 once the new IMO sulfur cap comes into force.
Showing the money
If MGO does indeed become the go-to fuel for global shipping, the extra bunker expenses may skyrocket, making long-haul freight too expensive and an arbitrage like Colombia to NE Asia unworkable.
To put numbers in perspective, extra costs for one Panamax voyage on this route at current MGO prices, comparing with standard fuel oil would exceed $230,000.
According to some estimates, the overwhelming demand for MGO come 2020 could propel its prices two to three times higher.
Considering the rising trend in oil prices, the extra bill per voyage could easily come to half a million dollars, making the whole arbitrage of 3 million mt costing over $21 million more in just fuel expenses.
Since bunker expenses make up 70-80% of voyage expenses, the freight may easily double, especially on longer routes.
However, as can be seen from the graph below, even with a modest 50% increase in freight, there would be almost no occasions when the Colombia-NE Asia arb would be workable.
Certainly, depending on which side of the fence you are sitting, it might be a good or a bad thing.
In general, the further the seller is from the buyer, the more they will be exposed to the negative effects of rising bunker prices. At the same time their short-haul competitors might have a good reason to smile.
You’re not alone
Certainly, it won’t be just coal that will feel the impact of the new regulations. The dry bulk market as a whole will be affected because the same tonnage is often used across various dry bulk commodities.
For example, if the long-haul grain arbitrage from the Black Sea to the East were to suffer, a drop in ton-mile demand may ease the freight burden for US coal exports.
In time, of course, both the oil and shipping industries will readjust to the new realities and both prices and trade routes will stabilize again.
However, before that happens, the coal industry should start keeping a beady eye on what is happening with bunkers and shipping to avoid nasty surprises on their balance sheets in the new decade.
This blog post was first published on the Coaltrans Blog.
The post IMO 2020, a shipping regulation that may reshape global coal trade appeared first on The Barrel Blog.
Seven of the benchmark commodity prices being tracked by S&P Global Platts since US President Donald J. Trump took office closed out 2017 higher than when President Obama left. Until Q4 2017, most commodity prices had struggled to see their 2017 running averages match — or surpass — their levels on the last day Obama held the office.
Although fundamentals and a range of other factors — such as seasonality, especially this time of year — influence commodity prices, a group of 11 benchmarks is being monitored by Platts and compared for Trump’s term versus Obama’s.
Dated Brent oil’s running average during the Trump era (January 20 through December 31, 2017) was $54.18/b, compared to $53.31/b on January 19. New York fuel oil’s running average was $47.73/b for the January 20-December 31 period, up from the January 19 mark of $47.03.
The biggest running-average gains since the inauguration have been charted by Chicago gasoline (+10.4%), jet fuel (+5.6%), COMEX gold (+5.5%), and ethanol (+2.3%). The US aluminum premium average is up just slightly since Obama’s last day.
But the running average prices of natural gas, thermal coal, iron ore and steel remain softer than Obama’s last day on the job.
What’s more, nine of the 11 benchmark prices being tracked are weaker than their averages during Obama’s two terms, ranging from -3.2% (gold) to -35.2% (for Dated Brent). Overall, these nine are averaging price levels some 19% below Obama’s two-term averages.
US-made hot-rolled steel coil and Central Appalachian thermal coal are the two commodities averaging slightly stronger pricing during Trump’s early term compared with their averages over eight years of Obama. Interestingly, coal and steel are two major industries actively wooed by Trump — both before and after his election.
The post Jan-Dec energy price averages rally late in first year of Trump: Of Presidents and Prices appeared first on The Barrel Blog.
Following a year-end selloff of crude to trim taxes on US Gulf Coast inventories, crude imports at the Louisiana Offshore Oil Port fell 3.235 million barrels month on month to 8.021 million barrels in December, according to US Customs Bureau and Platts Analytics data.
Imports of Middle Eastern crude fell 4.37 million barrels month on month — or nearly halved — to 4.961 million barrels, the data show. The decline in total Middle Eastern barrels imported to LOOP mainly came from a decrease in Iraqi barrels.
On a month-on-month basis, imports to Morgan City, Louisiana, from Iraq fell 3.255 million barrels to 3.51 million barrels. In December, Iraqi barrels made up only 44% of the barrels imported at LOOP, compared with about 60% in November.
So far in January, however, LOOP has only imported barrels of Iraqi Basrah Light crude, with 2.309 million barrels taken in so far.
Although imports from Latin America fell month on month, they rose marginally on a percentage basis to represent about 17.6% of total crude imports at LOOP.
Imports from Mexico, Colombia, Brazil and Venezuela fell by about 515,000 barrels month on month to 1.41 million barrels in December.
Venezuelan crude imports into LOOP dried up in December from a level of 925,706 barrels in November. The absence of Venezuelan exports to LOOP coincided with a drop in Venezuelan crude production in December to its lowest level in more than 15 years.
Imports of Mexican heavy sour crude to LOOP fell 23,000 barrels month on month to 477,000 barrels in December.
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.
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