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OIL
Russian ESPO crude delivered DES Shandong Province is trading at a premium to Brent for the first time since November, according to OilChem.
- The first deal which was sold above brent is an October arrival purchased by an independent refinery. The premium is up to 50 cents/b over December ICE Brent.
- The recent strengthening in ESPO was triggered by Russia's production cuts and demand from other buyers such as India.
- Despite price rises, ESPO is likely to remain a popular grade among buyers into Shandong, as it remains cheaper relative to Oman and Tupi grades, OilChem said.
- ESPO’s discount to Brent throughout 2023 had boosted imports, with deliveries into ports in Shandong and Tianjin hitting a high of 2.9m mt in March.
- Notwithstanding the increase in ESPO price relative to Brent, a scarcity of remaining import quotas could inhibit further Chinese buying. A fourth batch of import quotas could be released by the end of September, OilChem said.
Source: OilChem
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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