Developing sour crude at LOOP as a new global benchmark.
The Louisiana Offshore Oil Port LLC (LOOP) on the U.S. Gulf Coast is emerging as an important new pricing point for medium sour crudes in the global markets.
LOOP is presently the only deepwater oil port in the U.S. Following elimination of the ban on U.S. crude oil exports, LOOP has begun to emerge as the natural crossroads for traders moving sour crudes between East and West market centers. LOOP’s innovative work on storage auctions, pioneered with Matrix and the Chicago Mercantile Exchange (CME), has enabled access to a wide variety of market participants, accelerating LOOP’s growth as a trading hub.
LOOP is likewise becoming a swing location for heavy sour crudes moving between the world’s major oil refining systems. Asian refiners and Middle Eastern crude suppliers should be keeping a close eye on market developments at LOOP—especially the value of LOOP Sour, a new blend of U.S. and Middle Eastern crudes that is blended and traded in LOOP caverns.
S&P Global Platts began publishing the value of LOOP Sour among other crude grades in early 2017 and the number is being closely watched. The value of LOOP Sour is an important indicator of how aggressively U.S. refiners are competing with Asian refiners for medium sour crudes.
On the first Tuesday of each month, Matrix hosts an online auction of LOOP Storage Futures Contracts and Physical Forward Agreements.