Venezuelan crude oil was being offered this week to U.S. Gulf Coast refiners at a premium to competing Canadian barrels, two traders said.
Venezuelan Merey-16 oil was offered for U.S. Gulf Coast delivery at a discount of around $6 to Brent crude futures earlier this week, a trader said, while West Canadian Select at Houston settled at a roughly $12.50 discount to Brent on Tuesday.
Global commodities traders Vitol and Trafigura last week struck agreements with the U.S. government to help market stranded Venezuelan oil, days after the interim government in Caracas agreed to export up to 50 million barrels of crude oil to the U.S.
A full-scale resumption of Venezuelan oil exports could benefit refiners in the United States, while a boost in Venezuelan exports to the U.S. Gulf Coast could hurt Canadian companies that sell a similar heavy oil.
Canada’s crude tends to produce more naphtha – a lighter hydrocarbon produced after the oil is refined. With abundant availability of naphtha in the market, refiners may prefer the economics of running Venezuelan crude, two sources said.
(Reporting by Arathy Somasekhar and Georgina McCartney in Houston; Editing by Nia Williams)