By Marianna Parraga and Collin Eaton
MEXICO CITY/HOUSTON (Reuters) – Cash-strapped state-run oil companies in Mexico and Venezuela have begun diverting crude historically processed for domestic use and sending it to U.S. refiners now facing transportation constraints to secure similar grades from Canada, data shows.
The situation reflects an unusual set of events, including urgent needs by Venezuela and Mexico for cash for debt payments and investment, and demand for heavy crude in the United States due to less availability of Canadian oil, said traders and analysts.
The United States imported 1.675 million barrels per day (bpd) of Latin American crude in August, the highest level since May 2017, according to Refinitiv Eikon data.
(GRAPHIC: Latin American’s crude to cash: https://tmsnrt.rs/2PkkO78 https://tmsnrt.rs/2PkkO78) )
That gain occurred even though the preferred Latin American grade, Mexican Maya, fetches an about $50 a barrel premium to Western Canadian Select (WCS), because of transportation costs. Moving a barrel of Maya via tanker to the U.S. Gulf Coast costs about $1.50, compared to $35 for WCS via pipeline and rail.
Read more at : https://www.investing.com/news/commodities-news/venezuela-mexico-divert-crude-to-us-as-canadian-barrels-get-stuck-1661795