Signs of life emerge in physical crude; we doubt it’s sustainable in key areas
Commentary summary:
– Geopolitics liable to support crude structure for the foreseeable short-term.
– Bullishness on Chinese buying likely to be short-lived in our view.
– Global FOB premia have turned a corner, particularly light sweets, though Forties looks expensive now in its home NWE market.
– Johan Sverdrup is so cheap that it can arb into the USGC against LatAm competitors.
Geopolitics has helped to push flat prices and ICE Brent time-spreads higher, also helping to drag up CFDs further.
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