Day: February 8, 2018

Jones Act & Panama Canal Feb15

Presentation at Crude-by-Water Conference in Houston on 04 February 2015. A discussion on whether the new set of Panama Canal locks opening in 2q16 could accommodate the movement of USG crude to USWC refiners facing production declines in Alaska North Slope crude (ANS) and domestic Californian heavy crude. The higher operating and capital costs of Jones Act Alaska fleet would make the required earnings and freight costs too high to overcome typical differentials between ANS and light USG marker grades.  Download presentation here.

Citgo Refinery Sales Oct14

Market commentary in October 2014 suggested that the sale of PDVSA’s three Citgo refineries would unleash significant volumes of Venezuelan crude from the Citgo crude slates for Chinese export, and thus boost VLCC demand by as much as 4%. This is unlikely. Actual Citgo Venezuelan imports are modest, but necessary for the plants. Instead, rising tight oil production and Canadian crude imports should send Latin American volumes eastward, but the shift in Saudi pricing posture after we published this report should change the extent. If successful in pricing US tight oil and Canadian oil sands out of the market, then PADD3 seaborne imports will not fall as much and the refiners’ crude wall would be less acute.  Download report here.