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Venezuelan crude shipments to USGC fall 30% year on year

Houston (Platts)--7 Feb 2018 724 pm EST/024 GMT


US Gulf Coast imports of Venezuelan crude have fallen nearly 30% in a year, as production from that country has decreased to a near 30-year low, S&P Global Platts Analytics and US Customs data showed Wednesday. Year on year, USGC buyers imported 6.17 million fewer barrels in January 2018 than in January 2017 with January 2018 imports totaling about 14.714 million barrels, the data showed. Compared with the average monthly amount imported in the second half of 2017 of 16.455 million barrels, January 2018's imports fell about 1.741 million barrels.

Venezuela's oil production has fallen for six straight months, decreasing a further 60,000 b/d in January to 1.64 million b/d. Production this low has not been seen since June 1988, not counting strike-affected months, according to S&P Global Platts OPEC survey archives.

DCO IMPORTS DOWN

Of the Venezuelan crudes exported to the USGC, heavy sour grades Hamaca, Zuata, Morichal and Merey are brought in the most. Diluted crude oil (DCO), a blend of heavy sour crude often cut with naphtha, is also shipped frequently to the region.

USGC January imports of Zuata crude fell by about 180,940 barrels compared with the H2 2017 average to 541,126 barrels. Zuata has an average API gravity of 15.7 degrees and typical sulfur content of 2.69%.

Imports of Hamaca crude, which has a typical API gravity of 20 degrees and 2.32% sulfur content, also decreased compared with the H2 2017 average. In January, USGC buyers imported about 960,000 fewer barrels of the grade than in the months of H2.

Compared with the average for the last six months of 2017, January imports of DCO crude fell by nearly 2.216 million barrels to 1.6 million barrels. Merey crude imports also saw a falloff, with January volumes of 951,785 barrels about 385,180 barrels lower than the average H2 import level. Merey crude has an average API gravity of 15.84 degrees and typical sulfur content of 2.49%.

Meanwhile, January imports of Morichal crude were about 1.417 million barrels higher than the H2 2017 average. About 3 million barrels of the grade, which has an average API gravity of 12.2 degrees and 2.78% sulfur content, were imported in January.

FILLING THE SUPPLY GAP As Venezuelan crude imports have declined during the past year, the USGC has seen increasing volumes of heavy sour grades such as Iraqi Basrah Heavy, Colombian Castilla Blend, Mexican Maya, Saudi Arab Medium and Arab Heavy, as well as Western Canadian Select.

The largest increase in imported barrels has come from Colombia's Castilla Blend crude, with January shipments totaling about 6.237 million barrels. This represents an increase of 2.321 million barrels compared with the H2 2017 average.

In January, shipments of Maya crude to the USGC increased 1.225 million barrels compared with the H2 2017 average to 16.443 million barrels. PMI, the trading arm of state-owned oil company Pemex, recently decreased the K factor for March shipments of Maya to the USGC by 25 cents/b to minus $2.30/b in a bid to make the crude more competitive with other heavy sour grades.

Despite Saudi Arabia's vow to decrease overall shipments of its crude to the US, January imports reached 7.159 million barrels. This represents an increase of 1.659 million barrels over the H2 2017 average. Saudi Aramco lowered the official selling prices for March shipments of US-bound Arab Medium and Arab Heavy by 10 cents/b each.

Imports of Iraqi Basrah Heavy are up by about 596,000 barrels over H2 2017 levels, with USGC buyers having brought in 5.564 million barrels in January. For February volumes, Iraq's SOMO cut the February OSP for US-bound shipments of Basrah Heavy by 20 cents/b.

--Mary Hogan, mary.hogan@spglobal.com

--Edited by Richard Rubin, richard.rubin@spglobal.com




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