OPEC+ open the taps again, but prompt crude contango might have to wait a little
Commentary summary:
• Medium-term implications of oil demand and supply are numerous, regardless of intentions.
• Crude is increasingly asking to be refined into products with margins very healthy.
• Prompt crude spreads are backward and it may take more time for prompt structure to flip, if the refining response coming out of TARs is strong and with OPEC impacts in terms of real volumes needing assessed first. Pricing impacts on spot MEG will be immediate though.
• Small pricing hub nuances also matter; combined North Sea loadings for BFOET are due to drop to a 20-year low in June partly owing to Eko maintenance.
Whatever the real motivations behind this weekend’s decision to advance another hike, the impacts will be numerous.
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