Mexico is concentrating on U.S. West Coast refineries to spice up sales of its flagship Maya crude amid a worldwide oil glut.

Whereas Mexico has been an everyday supplier of Maya oil to U.S. Gulf Coast refineries, it hasn’t shipped any to the West Coast since February 2008, in accordance with knowledge from the U.S. Energy Data Administration. California refineries comparable to Valero Power Corp.’s Benicia, Chevron Corp.’s El Segundo and Phillips sixty six was massive consumers of the grade.

Petroleos Mexicanos, the state-controlled oil producer, took the first step in making Maya exports to the West Coast a reality Tuesday by issuing an official worth for November sales. Earlier in the day, Pemex said on its official Twitter account that it was planning to resume shipments to the area.

“With stronger margins within the U.S., Pemex’s transfer to restart Maya exports to the West Coast allows the company to seize a better value for the crude in comparison with Europe and Asia, Ixchel Castro, a senior analyst for Latin American oils and refining markets at Wood Mackenzie in Mexico City, stated in an e-mail. The exports halted at a time when margins in Asia were stronger, she said.

The company’s oil buying and selling arm, often known as PMI, set the differential to promote Maya into the West Coast at $3.70 a barrel below the price of a basket of crudes and gas oil costs for the region. The differential, identified as the Okay issue, compares with minus $12.Sixty five a barrel in January 2008, the final one issued, in keeping with knowledge compiled by Bloomberg.

The official promoting price for various components of the world is set using a regional basket of oils as a benchmark. Maya’s discount to the Asian basket is $10.Eighty for November.

Going through extra competition

“Mexico is going through growing competition in Asia from rising production in places like Saudi Arabia and Iran, Gurpal Dosanjh, a Bloomberg Intelligence analyst stated in an interview Tuesday. “With an enormous refinery upkeep season developing on the U.S. Gulf Coast, it makes sense for them to try to pursue the West Coast once again. br> Pemex is trying for brand spanking new destinations for its crude as exports rose to 1.26 million barrels of oil day by day in August, the very best in 10 months, in line with data from the Mexico Power Data Agency. Shipments elevated as low refinery utilization rates freed extra supplies for worldwide markets, John Galante, a senior analyst at Boston-based ESAI Vitality, said in a telephone interview. Refinery utilization charges at Pemex’s six refineries slid to 51 p.c in August. That compares with an 88.3 percent U.S. utilization rate Sept. 30.

Pemex has yet to find out when the primary cargo will likely be sent or the amount of crude, in line with a spokesman who asked to not be recognized in accordance with the company’s policy. The transfer will permit Pemex to expand and diversify its client base, he stated. Pemex isn’t at the moment considering increasing Maya exports to Asia, he said.

Although part of the U.S., the West Coast is seen as a market that could be very totally different from the Gulf Coast. It primarily attracts barrels from Alaska, Saudi Arabia, Canada and Ecuador that journey the Pacific Ocean. Maya can compete with Saudi crude given Mexico’s proximity to the U.S., but very few shipments are more likely to head north, Mara Roberts, a new York-primarily based analyst at BMI Analysis, said in an e-mail.

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