Oil Narratives
Oil Narratives - Flat Price
Flat price remains in a reactive mood, following geopolitics higher but is rangebound to the upside by increasing stockbuilds.
Outright prices are sitting at their highest levels since Q4, albeit still close to $10/bbl lower y-o-y.
Strong stockbuilds in the US, China, and on water are casting a doubt over sustained rallies, however.
Oil Narratives - Refining Diet
Balance of crude supply tilting towards the heavier end of the spectrum should see average refined slate getting heavier.
Cracking margins for UZ are higher than Murban, which is unusual, and reflects heavier barrels pricing to compete into refining.
Directionally leads to more middle distillates yield, lower straight-run naphtha yields.
Oil Narratives - Venezuela
Valero look set to be one of the main takers of Vz barrels.
In Europe, flows to Spain should remain steady, with some potential uptick.
To India, replacement for Urals via a blend of Merey + light crude (e.g. Murban) or outright heavying of diet leading to more middle distillates.
HSFO has tightened significantly in Asia since the US seizure of Venezuelan oil flows, signalling expectations that these barrels are going to stay in the Western Hemisphere.
