UPDATE 1-Latin America’s crude spot sales dry up, hit by low prices, demand fall -traders

(Adds context, details on tenders, prices)

By Marianna Parraga

MEXICO CITY, March 20 (Reuters) – Spot sales of Latin America’s heavy crudes mostly dried up this week after a severe oil price decline left some heavy grades in single-digit numbers, traders from producing companies told Reuters on Friday.

Latin America’s most emblematic heavy crude, Mexico’s Maya, declined on Wednesday to below $13 per barrel, its lowest level in 18 years, dragging down the price of similar grades whose formulas are indexed to Maya or price benchmarks like Brent or WTI, which also fell this week.

The only current spot offer for selling a Latin American heavy grade on the open market, launched this month by Ecuador’s state-run Petroecuador and scheduled to receive bids through March 25, has not been suspended so far, the traders said.

A Petroecuador spokesman told Reuters on Friday that all scheduled exports are going ahead as planned, so delivery dates will be fulfilled. He did not provide details on the tender.

But another tender launched by Colombia’s Ecopetrol to sell a cargo of Vasconia crude was suspended this week, while producers in Argentina and Mexico have avoided going to the spot market amid very low prices, the sources added.

Latin America’s oil producers have allocated about two-thirds of exports through spot sales this year, some of them on the open market and others in bilateral negotiations with customers. The remaining sales are made through long-term supply contracts that include price formulas less vulnerable to price spikes.

The proportion of Latin American spot oil sales as a share of total exports has increased after Venezuela’s state-run Petróleos de Venezuela, S.A., or PDVSA, and its joint ventures switched almost all exports to spot sales following U.S. sanctions imposed in early 2019.

PDVSA, Colombia’s state-controlled Ecopetrol and Mexico’s state-run Petróleos Mexicanos, or Pemex, did not immediately reply to requests for comment.

Reporting by Marianna Parraga
Editing by Daniel Flynn and Richard Chang

This post was originally posted on Reuters: Company News – View Original Article

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Have lived and invested in Venezuela full time for the last eight years and visited for each of twelve years prior to that. Studied and closely followed developments in Venezuela since 1996.