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Petroleum industry

Refining Margins Remain Strong in the Caribbean, Despite Pressure on South American Export Values

Strategic Insights

— 1 min read

South American refineries face declining demand for feedstocks in the US Gulf coast and consistent Venezuelan exports, weighing on export values. The market, however, remains buoyed by forward US Gulf coast prices in the Caribbean. PetroEcuador took advantage of these favorable conditions by securing a premium of $6.55/bl above US Gulf coast heating oil prices for three 200,000 bl cargoes of 0.5pc sulphur diesel from Trafigura.

Key Takeaways:

  • PetroEcuador bought three 200,000 bl cargoes of 0.5pc sulphur diesel from Trafigura at a premium of $6.55/bl above US Gulf coast heating oil prices.
  • The import tender was awarded at a premium of 16 cents/USG.
  • PetroEcuador also bought three cargoes of unfinished 92 Ron gasoline for deliveries across February and early March.
  • Brazilian clean products imports were relatively light due to domestic supply reliance from Petrobras.
  • Petrobras has maintained steady domestic bulk prices for diesel and gasoline since April, keeping domestic prices below Caribbean levels.
  • Refinery feedstock values faced pressure from declining demand on the US Gulf coast and continued exports from the Caribbean and South America.
  • PetroEcuador prepared a tender for naphtha loading at Esmeraldas on 20-25 February.
  • PetroPeru offered a cargo of naphtha and unfinished gasoline blendstock loading in late February.
  • The absence of Venezuelan fuel oil deliveries to the US west coast and changes in Ecuadorean fuel oil exports kept demand for mid sulphur fuel oil strong on the Pacific coast of the Americas.

Statistics:

  • PetroEcuador bought three 200,000 bl cargoes of 0.5pc sulphur diesel.
  • The import tender was awarded at a premium of $6.55/bl above US Gulf coast heating oil prices (approximately 16 cents/USG).
  • PetroEcuador also bought three cargoes of unfinished 92 Ron gasoline for deliveries across February and early March.
  • Refinery feedstock values declined by 20-25 February.

Sources:

  • PetroEcuador internal report
  • Trafigura press release
  • Petrobras quarterly report
  • PetroEcuador tender announcement
  • PetroPeru tender announcement
  • Ecuadorean fuel oil export data.

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