In The Physical Oil Market, Sour Barrels Trade at Sweet Prices - Bloomberg

In The Physical Oil Market, Sour Barrels Trade at Sweet Prices - Bloomberg:

Leaving behind the waters of the Caribbean Sea, the 1,100-feet long oil tanker Maran Apollo is emblematic of the wider petroleum market.

Steaming at 11.5 knots, she’s heading toward China, where oil demand is fast recovering, hauling a cargo of two million barrels of U.S. crude. But her voyage didn’t start a few days ago. She loaded in early May, and with no buyers during the worst of the coronavirus outbreak, the supertanker stood floating in the U.S. Gulf of Mexico for almost two months, waiting for better times.

Only a few days ago, she weighed anchor and left for the Chinese port of Rizhao -- a sign that refiners are starting to pull in crude that went unwanted for months.

It’s not any kind oil on board, though. Refiners are competing for barrels in one corner of the market known as medium-heavy sour crude -- barrels with a higher content in sulfur and relatively dense. It’s the kind of oil that Saudi Arabia and its allies pump. And also the type of crude that’s pumped offshore in the U.S. Gulf of Mexico -- and that’s what’s in the Maran Apollo’s tanks.