Brent bullishness still at odds with fundamentals
Commentary summary:
• DFLs getting bid up to very unusual seasonal levels, just as European light sweet supply appears ample.
• That keeps North Sea arb out to East closed; while arb into NWE has been ample/open.
• We still expect a correction in Brent spreads, related paper (CFDs, DFLs), at least on the arbitrage perspective and likely fundamentals basis, in the near-term.
• Med and Black Sea are arbing into NWE over North Sea and WAF on cracking basis.
• Sverdrup lost some strength in FOB premia, but is now more competitive against LatAm, WAF into NWE.
Flat price is kicking off again today with Trump threatening secondary tariffs on Russian oil and with more rhetoric on Iran.
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