Crude waits for possible MEG correction

27 January 2025 Time to read:  minutes

Commentary summary:

– Murban outcompeted by WTI, Forties, Black Sea in the Far East.

– Global medium crudes also arbing East over spot MEG.

– WTI looks cheap in Asia but relatively expensive in Europe; something that should help NSea and spot MEG begin to re-align.

– Freight rates are falling back again amid expectations of limited supply impact from OFAC sanctions beyond the short-term, absent further sanctions.

With trading in the East liable to be slow over the Lunar New Year, we may find limited action on spot MEG over the course of this week. However, as things stand, MEG crude is far too expensive and this strength should bleed into the rest of the global market more equitably.

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