WTI moves from relatively expensive to cheap in just a week
- Escalation of violence between US and Iran has markets in rally mode this week but seeing profit taking this morning.
- Much stronger values in North Sea Window pushing DFL higher.
- WTI/Brent spread hit our target -$9/bbl level for both Nov and Dec contracts.
- WTI is pricing relatively cheap vs regional baskets in NW Europe, Far East, SE Asia, and WCI.
- CPC and several WAF grades landing cheaper in NW Europe for the same end-of-October timing.
- WTI ranking very low on complex margin vs other light crudes.
- We covered Nov and Dec WTI/Brent spreads just wider than -$9/Bbl. We see strong reasons to be bullish the spread from here.
- We took profits on our long Mars Q4 basis position although there is likely even more upside for this position.
- We are looking for a good entry point (and liquidity) to go long Q1 27 Mars basis.
- Outright DFL or DFL rolls are likely a short-term sell (keeping a close on AG/Red Sea).
(Arbs radar ‘by origin’ on 4 Sep vs 11 Sep highlight WTI relative landed values)
(Arbs radar ‘by origin’ on 4 Sep vs 11 Sep highlight WTI relative landed values)
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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