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OIL: Weak European Crude Makes Flows East More Attractive: Sparta

OIL
BulletEnergy BulletsCommodities

WTI is now priced out of Europe where a glut of light sweet crude and price drops in competing grades vs Forties are adding pressure in northwest Europe, according to Sparta Commodities cited by Bloomberg.

  • Libya’s Es Sider grade declined by $1.55/bbl on Oct. 18 while Azeri Light and BTC have dropped a total of $4/bbl on an FOB basis over the last two weeks.
  • WTI Midland landed value into northwest Europe for Dec. 6-10 is pegged at a $1.20/bbl premium to the Dated Brent curve.
  • The weakening in physical Brent (CFDs) and Mediterranean and Black Sea differentials in freefall are making flows to the east more attractive.
  • Physical premia in Europe could start to rebound for a short while if Med/Black Sea barrels start to clear more substantially and without marginal WTI.
  • Sparta remain bearish crude time spreads short-term with soft demand indications in Europe and Asia despite coming out of the maintenance season.
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WTI is now priced out of Europe where a glut of light sweet crude and price drops in competing grades vs Forties are adding pressure in northwest Europe, according to Sparta Commodities cited by Bloomberg.

  • Libya’s Es Sider grade declined by $1.55/bbl on Oct. 18 while Azeri Light and BTC have dropped a total of $4/bbl on an FOB basis over the last two weeks.
  • WTI Midland landed value into northwest Europe for Dec. 6-10 is pegged at a $1.20/bbl premium to the Dated Brent curve.
  • The weakening in physical Brent (CFDs) and Mediterranean and Black Sea differentials in freefall are making flows to the east more attractive.
  • Physical premia in Europe could start to rebound for a short while if Med/Black Sea barrels start to clear more substantially and without marginal WTI.
  • Sparta remain bearish crude time spreads short-term with soft demand indications in Europe and Asia despite coming out of the maintenance season.