Paper crude weakens; physical signals remain lacklustre
Commentary summary:
– ICE Brent spreads weaken to 6-week lows and help push EFS lower.
– FOB premia have bottomed out and stabilised at substantially lower y-o-y levels.
– Healthy enough margins remain the main source of support for physical crude, assuming refiners start to up purchases for Jan-loaders in the West.
– The Asian cycle for Jan loaders has so far proven unsupportive for shorter-haul crude.
Timespreads in major crude benchmarks are hovering around 6-week lows, though still backwardated for now. Flat prices are at the low end of the range seen through Q3/Q4.
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