August 20, 2015 – FuelFix from the Houston Chronicle
Analysts: Little hope for more oil exports despite Mexico crude swaps
By: Robert Grattan
HOUSTON — About one week after the U.S. Commerce Department signaled it would allow trades of Mexican heavy crude for lighter U.S. oil, analysts have mostly dismissed the swap’s impact on the oil markets as only a minor improvement to refining efficiency.
Instead, market watchers say, the largest impact of the decision could be its symbolic value, cementing a crack in the long-standing crude oil export ban that U.S. oil can flow through.
Read the full article here: http://fuelfix.com/blog/2015/08/20/analysts-little-hope-for-more-oil-exports-despite-mexico-crude-swaps/
In the U.S., a swap could also help boost efficiency. Gulf Coast refineries are geared to run on heavier oil, and the shale boom has left many with too much light oil and less heavy crude — meaning a swap could help refiners run more efficiently too.
The U.S. already imports a large amount of heavy oil from Mexico and Canada. Energy consulting group RBN Energy estimated that U.S. refineries imported about 700,000 barrels per day of Mexican crude between January and May 2015, down from about 1.1 million barrels per day in 2011. Imports have been in decline recently as more Canadian heavy crude oil has found its way to the Gulf Coast and as Mexican oil production has tapered off.
One destination for the heavy crude could be the 340,000 barrel per day refinery Pemex owns in a 50-50 joint venture with Shell in Deep Park, Texas, RBN Energy said. In total, there’s about 2.4 million barrels per day of heavy crude processing capacity on the Gulf Coast.
