Storage at Louisiana Offshore Oil Port's Clovelly Hub was valued at 63 cents/b for January, a seven-month high for the front-month contract, according to Tuesday auction results published by Matrix Markets, which hosts the auction in partnership with LOOP and CME.
The auction results showed a willingness to pay more for storage at the US Gulf Coast terminal on a monthly basis versus during the November auction. Several scheduled refinery turnarounds have encouraged increased physical crude storage, as refiners take less crude to accommodate seasonal maintenance periods. Quarterly strip prices also experienced modest gains.
Second-month physical forward agreement storage was 65 cents/b, up from 55 cents/b in November. Third-month physical forward agreement storage, however, was down by 6 cents/b to 50 cents/b. The front strip (Q2 2017) was up 2 cents/b to 33 cents/b, and the second strip (Q3 2017) was 4 cents/b higher at 28 cents/b.
The total volume auctioned Tuesday was 6.8 million barrels for January 2017 to March 2017 and for the second-, third- and fourth-quarter 2017 strips. The auctionable total is fixed ahead of time.
The storage contract, launched in March 2015, is based on crude storage capacity at LOOP's Clovelly Hub, which has roughly 72 million barrels of storage. Each capacity allocation contract auctioned gives the buyer the right, but not the obligation, to store 1,000 barrels of LOOP sour crude at the facility, which is north of Louisiana's Port Fourchon.
LOOP sour is a blend of the Mars, Poseidon and Segregation 17 crude oil streams. Segregation 17 is a blend of Arabian Medium, Basrah Light and Kuwait. The average API gravity was 30.28 with sulfur at 2.18% from May 2015 to September 2016, according to LOOP.
