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OIL: North Sea Oil Strength Evaporates as Forties Drops: Sparta

OIL
Bullet

The European physical crude market is still mixed with North Sea strength proving a mirage, as Forties loading premiums shed $1/b in two days, according to a note by Sparta, cited by Bloomberg.

  • After weeks of open arbitrage, WTI Aframaxes now look more expensive in NWE since Forties has corrected.
  • Chinese independents have been actively snapping up an overhang of cargoes from the Middle East for Jan loading.
  • This suggests a potential intent to buy more spot Middle East in the February cycle as well as possible WAF crude instead of Iranian crude, Sparta said.
  • The prospect of this “switch” is the key bull for crude in the short-term with traders still watching buyer behaviour and Iranian exports.
  • Competitive levels for Arab light could hamper the Middle East spot rally, and some buyers in China are maximising nominations of Saudi crude for Jan.
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The European physical crude market is still mixed with North Sea strength proving a mirage, as Forties loading premiums shed $1/b in two days, according to a note by Sparta, cited by Bloomberg.

  • After weeks of open arbitrage, WTI Aframaxes now look more expensive in NWE since Forties has corrected.
  • Chinese independents have been actively snapping up an overhang of cargoes from the Middle East for Jan loading.
  • This suggests a potential intent to buy more spot Middle East in the February cycle as well as possible WAF crude instead of Iranian crude, Sparta said.
  • The prospect of this “switch” is the key bull for crude in the short-term with traders still watching buyer behaviour and Iranian exports.
  • Competitive levels for Arab light could hamper the Middle East spot rally, and some buyers in China are maximising nominations of Saudi crude for Jan.