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OIL: North Sea and WAF Weakness Issue for Crude: Sparta

OIL
BulletEnergy BulletsCommodities

Sharp declines in North Sea and WAF crude premiums signal pressure ahead for the physical crude market, according to Sparta Commodities.

  • Despite price signals, the global physical market is “slowly cooling to match flat price signals,” Sparta Commodities analyst Neil Crosby said in a note.
  • Meanwhile, Forties crude has “massively corrected” and is now competing harder against WTI in NWE. This is helping simple NWE margins to move closer to zero, compared to deep negative values last month.
  • While US Cushing stocks are low, the market assumes that weak margins will resolve the problem.
  • Murban premiums are holding strong, but Middle East medium margins are still weak overall, despite limited pressure from West of Suez arbitrage.
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Sharp declines in North Sea and WAF crude premiums signal pressure ahead for the physical crude market, according to Sparta Commodities.

  • Despite price signals, the global physical market is “slowly cooling to match flat price signals,” Sparta Commodities analyst Neil Crosby said in a note.
  • Meanwhile, Forties crude has “massively corrected” and is now competing harder against WTI in NWE. This is helping simple NWE margins to move closer to zero, compared to deep negative values last month.
  • While US Cushing stocks are low, the market assumes that weak margins will resolve the problem.
  • Murban premiums are holding strong, but Middle East medium margins are still weak overall, despite limited pressure from West of Suez arbitrage.