In a change of trade patterns, the United States booked a surplus in
its trade of crude oil and refined products with Latin America for the
first time since records began in 1993, but a proposal of a border tax
is a major wild card for the coming U.S.-Latin America petroleum trade
flows.
According to data by the U.S. Energy Information Administration compiled by Bloomberg,
the U.S. recorded its first ever petroleum surplus with Latin America
in October last year at 89,000 barrels a day. The surplus then increased
to 184,000 bpd in November.
The shift in trade patterns with
Latin America comes as Mexico, for example, imports growing volumes of
gasoline because its refineries are unable to meet surging demand.
Crude oil production dropped last year in Venezuela,
Colombia, Mexico and Argentina, on the back of low oil prices that sped
up the natural decline of some oil fields. Among the large Latin
American nations, production rose only in Brazil.
As for Mexico, according to EIA’s This Week in Petroleum
issue from January 25, the volume of gasoline trade between Mexico and
the United States is significant to U.S. refineries. Mexico is currently
implementing an energy reform to switch pricing to market-based prices
instead of government-set prices. The reform has led to soaring retail
prices.
Moreover,
Mexico’s refineries have historically been running at low utilization
rates because they are challenged to produce clean gasoline and
distillate fuels from the available marginal barrel of heavy sour crude
oil. Outages have also hampered Mexico’s six refineries recently. For
the first 10 months of 2016, U.S. exports to Mexico accounted for 54
percent of total U.S. gasoline exports.
However, the so-called Border Adjustment Tax (BAT) is expected to have a huge impact on U.S. crude: it would not only impact import flows, but exports and domestic production as well.
By Tsvetana Paraskova for Oilprice.com
No comments:
Post a Comment