Europe Facing Crude Supply Length: Platts

Tepid demand and ample supply are creating length for Europe’s crude markets, according to Platts Oil Market Podcast.

• NWE is looking at quite a heavy sweet market, with prompt North Sea markets struggling to find homes.
• Europe is also emerging from seasonal refinery maintenance, capping demand. Refinery margins have been on a downtrend, particularly across middle distillates.
• In the Mediterranean, light sweet differentials in the Med have weakened in recent weeks and have faced pressure.
• Med sweet differentials are facing steep competition from competitive WTI and WAF light sweet grades.
• The arbitrage eastward is also closed, blocking potential outlets. Weaker Chinese demand for Angolan crudes is raising Atlantic basin crude accumulation.
• North African crudes are having to move to a discount to remain competitive versus WTI Midland.
• However, Azeri and CPC grades have seen modest demand increases.
• Platts forecasts global oil demand to grow by 1.7m b/d in 2024.