Reporting by Tom Kloza, Dow Jones News Wires
NEW YORK
EnergiesNet.com 04 06 2023
Sharp differences in the cost of diesel have consequences and it looks like it will be a busy April for Western cargo traders.
OPIS sources believe that as many as 10 or 12 cargoes of distillate have been booked for shipment to Mexico and South America.
The brisk action is unusual, but it is rooted in the weakness of diesel prices in the region. Thanks to the intrusion of renewable diesel into the California distillate pool, action this week saw diesel on offer in Southern California for 24.5cts/gal under CME ULSD futures. Bay Area diesel was at a 20.5ct/gal discount and both markets were a better source for the Latin American appetite for diesel.
Most of the cargoes are hauling 300,000 bbl to 415,000 bbl of distillate and originating from Long Beach or the Bay Area. In addition to the typical Mexican demand, there has been interest for cargoes moving to Ecuador and other countries bordering the Pacific Ocean.
One trader predicted that old export records for the region would fall, thanks to the substantial arbitrage opportunity. The Energy Information Administration counted distillate exports of 1.134 million b/d last week, but the group doesn’t detail where the exports originate. Brisk movement of U.S. diesel from the Gulf Coast to Latin America has been a mainstay for most refiners.
This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.
–Reporting by Tom Kloza, tkloza@opisnet.com; Editing by Michael Kelly, mkelly@opisnet.com
marketwatch 04 06 2023
