Light Louisiana Sweet Widens Premium to Maya After Pemex Move
A spread between light and heavy crudes on the U.S. Gulf Coast widened after Mexico’s national oil company cut an official price to a two-year low to compete with other crudes going to refineries in Texas and Louisiana.
Light Louisiana Sweet gained against Mexican Maya after Petroleos Mexicanos, Mexico’s national oil company, adjusted the official selling price spread, or K factor, of Maya by 50 cents to minus $3.05, the lowest level since January 2011.
“What we’re seeing is the increasing amount of North American oil production making its way to the Gulf,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “Even though it’s light sweet crude, it’s going to begin pressuring the sour grades.”
Light Louisiana Sweet, the key light crude grade on the Gulf, gained 76 cents to a premium of $11.22 against Mexican Maya, the key heavy oil imported to the Gulf, at 4:13 p.m. in New York, according to data compiled by Bloomberg. It was the sixth gain in seven days for LLS and the largest since Aug. 1.
“To remain competitive with the other grades that are out there, Pemex will continue to adjust their K factor, which may very well result in increasing discounts,” Lipow said.
Gulf crudes strengthened against the domestic benchmark West Texas Intermediate. LLS’s premium rose 10 cents to $4.20 a barrel at 4:05 p.m., according to data compiled by Bloomberg. Heavy Louisiana Sweet gained 45 cents to a $5 premium.
Mars Blend strengthened 56 cents to a premium of 41 cents from a discount Aug. 30. Poseidon’s discount narrowed 75 cents to 45 cents a barrel.
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