OPIS Mexico Fuels Report Daily Prices, News & Analysis for Mexico Fuels Markets 15 September 2020 Daily Insights Daily Benchmarks Snapshots Mexico Postpones Release of Private Energy WATERBORNE LANDED SPOT PRICES Program Until October US¢/GAL MXN$/L PRODUCT SOURCE MEAN +/- MEAN +/- OPIS has previously reported the program could further define the EAST COAST MEXICO role of private investment under the Lopez Obrador administration. Reg Unl 87 USGC 110.927 2.58 6.175 0.14 Pg. 2. Prem Unl 91 USGC 115.714 2.70 6.442 0.15 ULSD USGC 101.293 0.19 5.639 0.01 Jet Fuel USGC 100.534 -0.70 5.597 -0.04 Chevron Pascagoula Refinery to Operate Through LÁZARO CÁRDENAS Hurricane Sally: Source Reg Unl 87 USGC 116.138 2.62 6.465 0.15 As of Tuesday afternoon, the 375,200-b/d refinery operated by Prem Unl 91 USGC 120.924 2.74 6.732 0.15 Chevron in Pascagoula, Mississippi, was planning to operate through ULSD USGC 107.173 0.23 5.966 0.01 Hurricane Sally, according to a person familiar with operations. Pg. 2. Jet Fuel USGC 106.042 -0.66 5.903 -0.04 ROSARITO NYMEX Overview: Prices Drift Higher After Down Reg Unl 87 LA 126.170 1.83 7.024 0.10 Session Prem Unl 91 LA 135.948 1.83 7.568 0.10 Petroleum futures rallied across the board today, led by crude oil and ULSD LA 109.085 0.48 6.073 0.03 RBOB as traders covered shorts ahead of Hurricane Sally, whose path Jet Fuel LA 101.213 -0.04 5.634 -0.00 continues to slide more to the east and away from Louisiana and the TOPOLOBAMPO New Orleans area. Pg. 3 Reg Unl 87 LA 126.733 1.83 7.055 0.10 Prem Unl 91 LA 136.510 1.83 7.599 0.10 Gulf Coast MTBE Skyrockets With Reports of Stronger Trade. Pg. 3. ULSD LA 109.720 0.48 6.108 0.03 GUAYMAS Landed Spot Daily Price Changes US ¢/GAL Reg Unl 87 LA 126.733 1.83 7.055 0.10 Prem Unl 91 LA 136.510 1.83 7.599 0.10 ULSD LA 109.720 0.48 6.108 0.03 Jet Fuel LA 101.808 -0.04 5.668 -0.00 Daily Wholesale Snapshot PEMEX TERMINAL POSTED PRICES MXN$/L TERMINAL REG UNL +/- ULSD +/- Monterrey (Cadereyta) 16.257 0.003 16.528 0.045 Guadalajara (Zapopan) 16.700 0.002 16.865 0.045 Mexico City (Añil) 16.226 0.001 16.432 0.045 San Luis Potosí 16.024 0.052 16.404 0.045 Querétaro 16.403 0.052 16.792 0.045 Veracruz 15.304 0.052 15.684 0.045 Tula 16.208 0.052 16.587 0.045 Exchange Rate USD $ → MXN $ 21.0728 © Copyright by Oil Price Information Service, an IHS Markit company, 2099 Gaither Road 5th Floor, Rockville, MD 20850. The OPIS Mexico Fuels Report is published each business day. OPIS does not guarantee the accuracy of these prices. Reproduction of this report without permission is prohibited. To order copies or a limited copyright waiver, contact OPIS Customer Service at 888.301.2645 (U.S. only), +1 301.284.2000 or [email protected]. OPIS Mexico Fuels Report Mexico Postpones Release of Private Energy Program Until October TABLE OF CONTENTS Mexico has postponed releasing its private energy infrastructure Waterborne Landed Spot Gasoline Prices ............................................ 4 program once again, expecting to release it now in early October, Waterborne Landed Spot Distillates Prices .......................................... 5 Mexican business leaders said. Rail Landed Spot Prices ......................................................................... 5 The government is much interested in the private sector's Oxygenates Landed Spot Prices ............................................................ 5 proposed projects, and the plan is expected to be released during the Mexico Freight Rates .............................................................................. 6 first week of October, Carlos Salazar Lomelin, president of Mexico's Shipping Notes ....................................................................................... 6 Business Coordinating Council (CCE), told reporters on Monday. OPIS Renewable Volume Obligation ..................................................... 6 Salazar spoke with media after meeting with President Andres Mexico’s IEPS Fiscal Stimulus ................................................................ 6 Manuel Lopez Obrador, Mexico's Finance Ministry (SHCP), and the Pemex Wholesale Prices ........................................................................ 7 Mexican Business Council (CMN). OPIS Regional Refined Products Heat Maps ......................................... 8 On Aug. 17, Lopez Obrador said his administration would release the program no later than Sept. 15 as part of its economic response Chevron Pascagoula Refinery to Operate Through plan amid the coronavirus disease 2019 (COVID-19). The program was first planned to be released in November 2019 Hurricane Sally: Source within the larger national Agreement on Infrastructure Plan, which As of Tuesday afternoon, the 375,200-b/d refinery operated by announced a $45 billion package of projects. Since then, the energy Chevron in Pascagoula, Mississippi, was planning to operate through program was postponed in February and April by the government. Hurricane Sally, according to a person familiar with operations. Energy projects were pulled from the initial agreement days before Like Shell Chemical LP's refinery in Mobile, Alabama -- also the national infrastructure plan was released in November amid planning to operate through the storm -- the Chevron plant is located opposition from senior administration officials, multiple Mexican within the projected landfall area of Sally. media outlets reported. The Anglo-Dutch company will the 90,600-b/d refinery in Mobile, OPIS has previously reported that analysts think the energy Alabama, through Hurricane Sally, "taking the necessary precautions program will further define the role of private investment under the to ensure the safety of employees and manufacturing processes," the Lopez Obrador administration. company said Tuesday. The program could be a turning point for the energy industry, The plant's primary product is heavy olefin plant feed, according to boosting investment confidence for selected projects while turning Shell'swebsite, along with liquid petroleum gases, gasoline, jet fuel, away promoters of projects that weren't added in the program, diesel and No.6 oil blend stock. analysts approached by OPIS have agreed. The National Hurricane Center (NHC) currently expects the storm According to an SHCP presentation leaked and widely reported by to make landfall in a warning area covering the coasts of Mississippi, the Mexican media earlier this month, CCE has proposed that the Alabama, and the far western Florida Panhandle late Tuesday or government support the development of 279 private energy projects Wednesday. worth $98.9 billion in investment. Mobile Bay is under a storm surge warning from Hurricane Sally, The presentation indicates that over 30 projects are for refined along with the northern Gulf Coast between the mouth of the products storage worth over $4 billion. SHCP didn't disclose which Mississippi River and the Okaloosa/Walton County Line in Florida. company is behind which project. As of 4 p.m. CT, the NHC's warnings for maximum storm surge show The projects with the highest investment costs are a $296 million the highest potential levels -- 4 to 6 feet -- between Dauphin Island, terminal in Veracruz, a $288 million facility in Manzanillo, and a Alabama, to the Alabama-Florida border, including Mobile Bay. second $265 million terminal in Veracruz. Lower storm surge maximums extend as far west as Grand Isle, The private sector has also proposed working with Pemex on Louisiana, and as far east as Chassahowitzka, Florida. projects to produce ultra-low-sulfur diesel at Pemex's 315,000-b/d Rainfall is seen heavy along the northern Gulf Coast due to Sally's Tula and 275,000-b/d Cadereytarefineries. expected slow motion through Wednesday. Accumulations are CCE declined to comment to OPIS about the reasons behind the forecast at 10 to 20 inches, with isolated maximums of 30 inches postponement of the program amid ongoing negotiations with the along and just inland of the central GulfCoast from the western government. Florida Panhandle to far southeastern Mississippi. --Reporting by Daniel Rodriguez, [email protected]; Editing --Reporting by OPIS Staff, [email protected]; Editing by by MichaelKelly, [email protected] Michael Kelly,[email protected] © Oil Price Information Service (OPIS), an IHS Markit Company 15 September 2020 | Page 2 OPIS Mexico Fuels Report NYMEX Overview: Prices Drift Higher After Down Indorama is a chemical plant located in Port Neches, Texas. The source added that the facility has been shut since Hurricane Laura, Session when it reportedly suffered a power outage. Petroleum futures rallied across the board today, led by crude oil and Meantime, the rest of the Gulf Coast gasoline market was seeing RBOB as traders covered shorts ahead of Hurricane Sally, whose path implied price stack on gains of at least 1.50cts/gal this afternoon, continues to slide more to the east and away from Louisiana and the following an overnight timing change where Cycle 54 took over as New Orleans area. prompt. Not only was the storm moving toward the coast supporting prices, --Reporting by Andrew Atwal, [email protected]; Editing by but equities markets were on the rise as well. Those short-term Michael Kelly,[email protected] factors, however, were outweighing the somewhat bearish demand expectations from the International Energy Agency. WTI picked up just over $1 on the day, and the gains in the Brent PADD5 Gasoline Demand Sees More-Than-Usual contract fell just shy of $1, helping to narrow the spread between the Plunge After Labor Day: Sources two benchmarks for November to less than $2/bbl. Wildfires burning on the West Coast have blazed a path of destruction The rally in crude oil prices, trade sources said, was a mini breakout in their wake, and that includes a heavy dose of demand destruction as the settlement price of $38.28/bbl was the highest in nearly two for gasoline and diesel.