Crude
Market Overview
September will mark the first month that the markets will not have ICE Murban/Dubai as a transparent way to gauge where the AG light market is.
China losing Iranian barrels due to the blockade and maxing out Russia, but having low monthly Saudi term allocations, has resulted in more spot buying activity.
A VLCC of Forties is loading next week for end October delivery into China. With supply reduced in North Sea, there is more uplift in the Dated market and with recent geopolitical flare-up would support a wider Brent-Dubai spread.
The AG markets are more supported this time compared to the mid June period when a mini-glut was faced, as the additional cargoes are for a forward month lifting rather than crude sitting in VLCCs available for immediate release.
Governments are now more ready to start replenishing their SPR as well.
After drawing down 90 mb of SPR equivalent to 50 days of consumption, Japan issued a buy tender for 4 mb of medium and light grades for Q4 delivery.
Korea had opted for a crude oil reserve swap, with the scheme lasting from April to June, and heard to have been restarted in September.
China will also put a floor to any AG prices as they can also look to rebuild inventory.
