Flat-price/risk-off sell-off hurting Europe’s ability to attract imports
- Day after massive flat-price sell-off, North Sea and USGC grades are still relatively expensive.
- Mediterranean light grades landing better than WAF grades in NWE.
- Libya’s NOC’s declaration of a possible force majeure is a bullish sign for Brent-related markets.
- December WTI/Brent has widened significantly in the past two days but needs to do more work to allow USGC exports.
- Spot Houston/Rotterdam Afra freight down $12/mt from recent highs, but our forward curve puts freight right back at the highs.
- October DFLs have sold off nearly $4/bbl since the 15th, further hindering the region’s ability to attract barrels.
- We also like buying the October DFL around $5/bbl and looking for it to move back up towards the $15/bbl area that the September contract was able to reach.
- We believe December WTI/Brent needs to trade back out to at least recent lows, or -$9.25/bbl.
- Above trade ideas assume hostilities in the AG continue without resolution.
About the Author
Aaron Kildow | Crude Commodity Owner, Sparta Commodities
Aaron is Sparta’s Commodity Owner for crude, covering physical and financial oil markets, hedging structures, and customised oil balances. He co-founded The Oil Balance and spent over a decade at Macquarie Group building supply/demand models for Cushing, PADD 1, and PADD 3, with earlier trading and derivatives roles at CHS, Musket Corp., and Prudential Financial.
Connect: LinkedIn
About Sparta
Sparta is the AI leader for commodity trading, home to Leonidas AI, the first decision-making engine for oil and commodity traders. Backed by USD 42 million in Series B funding led by One Peak, with participation from returning investors FirstMark and Singular, the same investors behind AI leaders like Legora, Dataiku, and Synthesia. From independents to multinationals, the world’s leading commodity teams use Sparta and Leonidas AI to move faster, trade smarter, and stay ahead of the market.
For more information, visit Sparta or follow us on LinkedIn.
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