Mero, Mero, Mero In The Sea, Who's The Fairest Of Them Be? June 21, 2023

Locator: 44997OILGRADES.     

The economy is booming!

Yesterday I mentioned that despite US refiners working at near-full capacity, they simply can't keep up, particularly with regard to diesel, part of the reason being the "right kind of oil."

Today, a great note out of Brazil. Exactly the grade of oil refiners need to make diesel oil. Should go to the US but will end up going to China.

Link here.

With this surge folks might understand better why trading range of oil stays so narrow and has trouble breaking out. Again, we're not going to run out of affordable, accessible oil any time soon. Something for investors with long horizon to think about. 

Mero grade.

Before talking about Mero grade, this article from 2018: Brazil to export a new grade of oil -- Buzios crude. From this article:

• exports directed toward China:
• Buzios:
• from the pre-salt region of the Santos Basin;
• about 120 miles off the coast of Rio de Janeiro and its beautiful white sand beaches;
• a medium heavy crude (perfect for diesel, unlike WTI / Bakken)
• an API gravity of around 28.4 degrees
• sulfur content is around 0.31%
• by 2019: 750,000 bopd
  

In the same article:

• "Mero is a new crude with an API gravity of around 28.6 degrees (same as Buzuios) and sulfur content of around 0.32% (same as above)."
• again, perfect for diesel, unlike WTI/Bakken.

See grades of crude oil here to compare.

US refiners would love this new crude but the new crude will probably be directed to China.