US Gulf Coast cash crudes tumble as exports expected to plummet

摘要

The discount on WTI futures to Brent futures widened by $2.33/bbl to $4.45/bbl.Normally,a wider arbitrage makes US grades more attractive for the export market,but surging supplies of crude from Saudi Arabia and other competitors have drawn buyers’attention.Forecasts from various market watchers indicate US crude exports will dive by 1MM b/d in coming months due to the price war.News of refinery run cuts in response to declining demand added further pressure to Gulf Coast grades.Storage rates already doubled in the past month at the Cushing(Oklahoma)hub,and plans by the US government to begin purchasing crude for the strategic petroleum reserve did little to support domestic prices since many see the move as a”drop in the bucket.”HLS(priced at Empire,Louisiana)posted the week’s steepest price decline of the US Gulf Coast crudes covered here over the week ending March 20,dropping $16.24/bbl to end at $15.98/bbl.WTI priced at the Magellan East Houston terminal(MEH)in TX lost $13.86/bbl to $18.61/bbl,while LLS(priced at St.James,LA)fell by $13.14/bbl to end the week at $18.73/bbl.WTI priced at Midland slid by $12.99/bbl over the week to hit $16.98/bbl,and the price for WTS lost $12.39/bbl to end at $17.58/bbl.Mats decreased by $11.99/bbl to $16.48/bbl.LLS,WTS,and Mars ended the week at lows not seen since Jan.2002,while HLS and Midland ended at lows not seen since June 1999.MEH ended the week at the lowest price in Reuters data going back to Dec.2016,and cash differentials on the grade flipped into discounts for the first time ever on Tuesday.