U.S. refineries see upside to Latin America fuel shortage

Source: Bloomberg / Nola.com

From Brazil's Petroleo Brasileiro to Mexico's Petroleos Mexicanos, state oil companies have failed to complete nine projects worth at least $36.4 billion that would have supplied 1.2 million barrels of gasoline and diesel daily. U.S. refiners have stepped up to help fill the gap, with exports almost doubling in the past six years, according to the U.S. Energy Information Administration.

Falling oil prices, high levels of debt and failure to find partners to help finance the plants are among the reasons cited by Pemex, Costa Rica's Refinadora Costarricense de Petroleo and Colombia's Ecopetrol for postponing their plans. Brazil's Petrobras has been slowed by the price drop as well as a corruption scandal.

"Refinery investment plans in the region have really fizzled out over the past year or so," Mara Roberts, a BMI Research analyst based in New York, said in an e-mail. "Latin America is keen to take in growing U.S. supplies."

U.S. exports to the region have been rising steadily and reached a record 1.88 million barrels a day this year. Latin America now accounts for 42 percent of America's fuel exports, up from 38 percent a decade ago. U.S. fuel output increased 4.1 percent over two years to a record 19.9 million barrels a day in 2015, EIA data show.



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