Crude
Market Overview
Crude: US-Asia arbs favourable
WTI is now landing into the Far East much more competitively than Murban for early November delivery, with recent steep rises in Murban driven by ADNOC trimming August and September volumes.
WTI Midland is landing around $7/bbl cheaper than Murban, a discount not seen in recent weeks. Murban and Oman still win the complex margin battle, though only while available volumes are comparable.
Crude: US-NWE arbs also favourable
WTI has found a steady outlet into NWE, landing cheapest into the region across early October delivery windows despite weakening DFL spreads.
Recent US inventory builds on SPR releases in PADD 3 further supports WTI competitiveness into the region.
Supporting the outlook is the decline in TD25 FFA, with vessel supply staying elevated over the month at 24 Afras in region, 6 above the 90-day average.
Crude: Inventories set to weaken
US commercial inventories have built over the past month on continued SPR releases and a lack of material export outlets for crude.
Those builds, the re-emergence of Asian buyers and continued NWE importer support into September loading windows should lift export demand. Bullish refining margins are also prompting a light turnaround season, and most notably the first SPR swap is due back at the end of August, adding strong support to US crude pricing.
Overall, WTI spreads should continue to gain over the immediate term.
