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Mars crude oil prices drop on zinc contamination sources

Six traders and a source in the industry said that the zinc contamination of the Mars crude oil stream has slashed the price of the U.S. flagship coastal crude on Tuesday.

Mars, an offshore grade popular with U.S. refining companies, is a grade that has been a major supplier along the U.S. Gulf Coast. This comes at a time of tight supply due to the absence of heavy Venezuelan barrels.

Mars was trading at a 10-cents discount to crude oil in the Cushing storage hub, Oklahoma. This is a reduction from a 75 cents premium on Monday.

Shell, the company that operates the Mars platform did not respond to a request for comment.

Two sources confirmed that the contamination was probably caused by an additive used at the platform. Zinc is not found in crude oil.

Zinc in crude oil can cause corrosion and damage to refinery units.

According to Energy Aspects, the Mars platform produced around 160,000 barrels a day in the past 12 months. The grade is shipped to Clovelly, Louisiana. Reporting by Arathy S. Somasekhar in Houston, Georgina McCartney and Shariq K. Khan in New York. Editing by Matthew Lewis.

(source: Reuters)