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US LOOP reports 855,000 barrels of sour crude deliveries for February

Over 855,000 barrels of sour crude oil was delivered from the Louisiana Offshore Oil Port in February, an increase of 205,00 barrels on the month, LOOP reported.

Monthly LOOP Sour deliveries have increased steadily since October, and February represented the most deliveries reported since August last year when 790,000 barrels were taken out of storage at the facility. Before pandemic lockdowns took hold last year, LOOP deliveries reached 810,000 barrels in February 2020.

Deliveries of the grade, which consists of a blend of Poseidon, Mars and Basrah, Kuwaiti and Arab Medium crudes, have increased as market conditions have steadily shifted into backwardation.

That often can disincentivize market participants from storing crude and gives more incentive to taking crude out of storage. Refinery usage also has been growing, although winter storms in February took a bite out of consumption as some Gulf Coast refineries were forced to close. Power outages impacted Texas’ refinery capacity, with as much as 4.4 million b/d offline during the week of Feb. 18. Most refineries have begun restarting, but effects may linger until mid-March.

The average API gravity for LOOP Sour in February was 29.91 degrees — lighter than January’s average of 29.67 degrees; and sulfur content averaged 2.04%, which was more sour than the month prior’s average of 1.92%.

Loop storage auction

LOOP and Matrix Markets sold 150 of the 9,300 capacity allocations contracts that were offered during its monthly crude storage auction on March 2.

Physical Forward Agreements, which gives the purchaser the right to store 1,000 barrels for one month at LOOP were auctioned for the front month of April through the second quarter of 2022. Fifty PFAs for the first quarter of 2022 were sold at 5 cents/b during the most recently auction.

In February Matrix sold 1,275 LOOP Capacity Allocation Contracts, which included Physical Forward Agreements ranging in price from 5 cents/b to 10 cents/b.

Matrix pipeline platform

Matrix also announced the launch of a new secondary market platform through which participants can buy and sell unused capacity crude oil pipeline capacity.

The platform, called Matrix Pipeline Marketplace, allows owners to post unused capacity for sale and those seeking pipeline space can post their requests for capacity.

The initial rollout of Marketplace will include space postings for the Shell Zydeco, TC Energy Marketlink, Philips 66 Gray Oak, Enterprise/Enbridge Seaway and Magellan Bridetex pipelines, all of which move crude from various points to the US Gulf Coast. Matrix plans to add more available pipelines to Marketplace each week.

In an announcement Matrix said participants can execute transactions directly on the platform and allows users to publish prices, define timings and set injection and delivery points. Users also can use the platform to lift any counteroffer and receive notifications when a counteroffer has been made.
Source: Platts

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