A scene from a Mexican highway. Photo: Shutterstock A weekly look at what occurred in the oil markets of the U.S. and the world this past week. –There’s so much focus on the IMO2020 rule in the transport sector, as companies start to realize that diverting that much distillate into the marine market could tighten supplies for their own needs. A more pressing switch began occurring this week, when Mexico started requiring ultra low sulfur diesel—with 15 parts per million sulfur—for all diesel use in that country. The expectation, according to news reports, is that it will add about 150,000 to 180,000 barrels/day of ULSD demand. There had been hints that Mexico might delay the rule but it chose to go ahead with it. Most of that new supply to meet the demand, if not all of it, is going to come from the U.S. which already supplies more than anywhere between 250,000 to 300,000 b/d of diesel to Mexico. That country’s battered refining sector does not have the capability to meet its own needs. Distillate inventories in the U.S. have been running tight, even with refineries operating at 95% of more of capacity. But the weekly American Petroleum […]
