Jaromir Ondra
Exxon Mobil (NYSE:XOM) bought Mars crude for August delivery, Reuters reported late Wednesday, after briefly halting purchases of the flagship offshore grade due to a zinc contamination issue.
The contamination in the Mars crude stream had pushed Exxon (XOM) to borrow as much as 1M barrels from the Strategic Petroleum Reserve for its Baton Rouge refinery in Louisiana; the company will return the borrowed crude along with additional barrels of crude oil for the SPR at no cost to the taxpayer.
Supply of the Mars grade to the Gulf Coast refining hub was reduced last week after Chevron said the start-up of a new offshore well may have contributed to the change of the composition of the Mars crude grade and zinc contamination of the medium sour crude.
Following the emergence of the Mars quality issue, the grade traded this week at a $0.30/bbl discount to the U.S. price at the Cushing, Oklahoma, hub compared to a $1/bbl premium to Cushing crude at the end of June.