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OIL: No Sign of Physical Crude Improvement as North Sea Lacks Outlets: Sparta

OIL
BulletEnergy BulletsCommodities

Despite Middle East tensions, the physical crude market is “showing little to no signs of turning around and remains in reasonably poor shape,” according to Sparta Commodities cited by Bloomberg.

  • The North Sea light sweet arbitrage to the Med looks increasingly closed, and remains unworkable to the Far East.
  • Light sweet premia in the Med/Black Sea/WAF look fairly cheap and set to put WTI (in Suezmax) under pressure over the coming days.
  • Available WTI exports look likely to rise over the coming weeks while Asian demand for the grade still limited, and US crude stocks are rising rapidly.
  • European refineries are showing few signs of increased demand despite the expected decline in maintenance expected in November. Margins holding at improved levels might temporarily boost buying but is not considered bullish while cracks may “not respond well to the end of maintenance.”
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Despite Middle East tensions, the physical crude market is “showing little to no signs of turning around and remains in reasonably poor shape,” according to Sparta Commodities cited by Bloomberg.

  • The North Sea light sweet arbitrage to the Med looks increasingly closed, and remains unworkable to the Far East.
  • Light sweet premia in the Med/Black Sea/WAF look fairly cheap and set to put WTI (in Suezmax) under pressure over the coming days.
  • Available WTI exports look likely to rise over the coming weeks while Asian demand for the grade still limited, and US crude stocks are rising rapidly.
  • European refineries are showing few signs of increased demand despite the expected decline in maintenance expected in November. Margins holding at improved levels might temporarily boost buying but is not considered bullish while cracks may “not respond well to the end of maintenance.”