The price of Ecuadorian crude has been revalued in recent months. Is that according to the data of the Central Bank, while in January the price was at $ 44.8; for October (last report) the price was $ 50.4. In parallel, the price of WTI crude, which is a benchmark for Ecuadorian crude, has also risen this year.
However, the increase in the price of Ecuadorian crude takes on greater relevance as the differential has also fallen (punishment of the price of Ecuadorian crude against WTI).
It is that while in January of 2017, the Ecuadorian crude differential was at – $ 7.74 for October is at – $ 1.13.
For the Minister of Hydrocarbons, Carlos Pérez García, this revaluation or lowering of the differential is due to the behavior of the market itself.
In these days, the refineries of the United States require crude oil of the Ecuadorian specificities.
That country, he explained, with its shale production that generates a light crude oil requires heavier oil to mix it and use it in its refineries.
The truth is that the differential had its first significant decline from June 2017, going from $ 7.14 to $ 4.94. On the subject experts have several explanations for this better behavior of the price of Ecuadorian crude. According to Fernando Santos Alvite, the reason could be that OPEC has reduced the production of its crude oil and it is precisely the heavy ones that have reduced the most.
This could have revalued the Ecuadorian crude that is heavy. However, according to Santos, the value reported in the Central Bank could be greater than what the country is actually receiving.
This is because, as recognized by the Minister of Hydrocarbons, Ecuador in recent months is billing China and Thailand according to a formula that the authorities consider appropriate, but Asian companies are paying according to their own calculations, which represent a lower income for the country. He also considered that crude oil is sold better at the end of the year because of a seasonal issue Luis Calero, oil expert, said that the differential is defined by supply and demand, but does not rule out the possibility that the improvement in prices is due to the fact that after a series of allegations of corruption and injury to the country in the establishment of prices, they are trying to avoid speculative factors in the calculation. (I)