RE:wondering...Yes, we discussed this before.
When the Olmeca refinery is fully ramped up in a matter of a few months, it will displace about 350 kbpd of Mexican medium sours that were going to the gulf refiners.
Add the 600 kbpd of Canadian heavy crude that will be displaced by TMX in end of 2023, and the US refiners will suddenly be short nearly a million bbls of feedstock.
USGC refiners must then find other sources of this type of oil on the global market to keep their refineries operational, driving the prices of medium and heavy sours to a premium.
On the other side of the world, Indian refiners are set up to refine light sweet. Yet the huge amount of Russian medium sours they are now processing are bought at such a discount, the inefficiencies of the higher amount of low value residual fuel oil produced as a by product makes up for the cheap price.
They don't use cokers to process, and the investment and time required to build them is not worth it if this current sale on Russian medium sour crude is only temporary.
As Indian refiners now consuming a huge amount of medium Russian sours that they never used before, it displaces the light sweet they would have used. This acts to tighten the global medium sour markets even further, while dragging down light sweet.
How to play this as the diffs tighten?
My take is that as Suncor is so vertically integrated into domestic Canadian markets, I would think there would be better plays to take advantage of increasing heavy sour pricing, more leveraged like ATH, MEG, etc.
I still own SU, but for other reasons.
parcheg wrote: Question to my learned friends on this BB: woth Olmeca refinery in Mexico startin up (therefore starving a few gulf states supply of heavy crude) iis anyone stepping up their holdings in SU at an almost year low SP?<br /> Askng for a friend...