Pipeline closure pushes prices of Heavy Louisiana Sweet oil

Heavy Louisiana Sweet oil has risen to a premium over Light Louisiana Sweet since Exxon Mobil Corp. shut a portion of its Southwest Pipeline System from South Bend to Sunset. The 12-inch line that carries Heavy Louisiana Sweet oil from South Bend to Krotz Springs was shut “indefinitely” Oct. 31, according to an Oct. 21 bulletin sent to shippers obtained by Bloomberg News. Exxon made alternative arrangements available for customers before the closure, Patricia Errico, an Exxon spokeswoman, said in an email. Exxon shut the pipeline after a special permit application seeking to “modify repair criteria” on the segment was rejected. Alon USA Energy Inc. shut its 83,000-barrel-a-day Krotz Springs refinery for upgrades that will improve the capacity of the plant’s fluid catalytic cracking unit and its ability to handle different grades of crude, the company said in a Nov. 3. statement. Alon said it expected to finish work during the first half of this month and that throughput will exceed 62,000 barrels a day in the fourth quarter. Heavy Louisiana Sweet has climbed to a premium of $1.65 a barrel over Light Louisiana Sweet from a discount of 70 cents on Oct. 31, according to data compiled by Bloomberg. Read the rest of this week’s 10/12 Corridor newsletter here.