Crude
Market Overview
Crude: US-Iran re-engage
TC14 rates have been trading near fair value, as current USGC MR vessel supply in the seven-day-ahead window sits at 13 while incremental demand is neutral.
Should HOGO narrow due to demand for distillate imports into Europe, as the conflict re-escalates, there may be a buying opportunity for TC14.
Crude: WTI into Europe remains open for now…
WTI appears widely unattractive into NWE and Far East as US inventories have continued to draw.
In the immediate term, this is likely to hold, as Europe takes in AG cargoes that made it out of the Strait during the MoU ceasefire over August.
WTI has flowed into Northeast Asia as concerns surrounding crude supply chain security prompt crude swaps with the US.
The combination of Atlantic basin crude swaps and further taps of eastern SPR.
Given the prospect of AG once again becoming scarce, Mars has followed the rest of the US physical differentials higher.
Notably, however, Mars currently appears broadly unattractive to the Far East, while being fairly valued into the MED as physical FOB premiums gain.
This may push Far East demand towards WAF medium-sours in the immediate future, but it provides a constructive outlook for Mars as AG medium-sour supply dwindles.
