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Brent Dubai Spread to Widen on Structural Bullish Tanker Market: Goldman

OIL

The Brent-Dubai crude spread is forecast wider at 80c/bbl on average over 2024-2025 according to Goldman Sachs although with potential for seasonal swings of about $1/bbl during winter.

  • “Despite elevated and volatile refining margins, it is still the locational component — rather than the quality component — that drives our forward view on crude differentials.”
  • The outlook is 20c/bbl higher than forward pricing as the structural bull market in oil tankers will widen regional spreads.
  • The drop in northbound crude flows through the Red Sea requires stronger Brent prices to attract barrels to Europe given embargoes on Russian oil. Higher freight rates would normally weaken Brent versus Dubai.
  • The Brent-WTI spread is forecast to average $5.30/bbl over 2024-2025 with expectations for structurally higher tanker rates and continued growth in US crude exports.
  • The Cal24 WCS-WTI spread is seen at $16/bbl on higher tariffs on US Gulf Coast-bound pipelines.

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