WTI to Be Most Competitive Grade in Europe: Gunvor

Rising US production of light sweet crude was likely destined to be the most competitive grade in Europe, despite the recent shift in global trade flows caused by Russian sanctions, Gunvor’s general manager David Garza told Argus.

• "There was a concern that WTI was dislocated from the global benchmarks from the past," Garza said. But that is not much of an issue anymore with more production getting to international markets, particularly Europe, he added.
• Garza expects West Texas volumes will rise by a least 500kbpd in 2024.
• "I think this will continue to be an export business for the marginal barrel," he said, with domestic options not keeping pace with the additional volume. "[US Gulf coast refiners] are kind of maxed out in the sweets they can run”, Garza added.
• Canadian producers are also expected to bring more volumes to the market once the 590kbpd Trans Mountain Expansion pipeline comes online in the coming months, directing some crude to the Pacific coast rather than through the US, he added. Operators have their eyes on Asia-Pacific but Garza expects some of that volume will stay closer to home.