Crude
Market Overview
Crude - Market Overview
WTI Midland prices for delivery into NWE medium complexity refiners in late July are supportive for transatlantic flows.
Relative to other basket grades such Forties and Forcados, WTI landed values into NWE are becoming more attractive, especially since the last decade of May.
Weaker TD25 freight rates and declining fob prices have supported landed costs, while TI/Brent has remained relatively stable.
Given that US gasoline peak demand season is underway, NWE gasoline output and demand for light-sweet grades will remain supported. But continued strong draws at Cushing will at some point crimp arb economics, potentially creating opportunities for (relatively) better landed values for WAF grades.
Crude waterborne imports into China has fallen below 10 mbd in April, and rumoured to be only ~6-7 mbd for May and June as the nation continues (at the margin) to drawdown inventory rather than tap the spot Dubai.
The lack of Chinese appetite is helping other Far East buyers source Atlantic Basin grades, in particular WTI and Guyanese VLCC barrels. But other long-haul sources (e.g. North Sea, WAF, Black Sea) are less competitve.
