Crude
WTI now very expensive everywhere on the BASKET basis, except Far East.
WAF became very cheap with diffs plummeting in mid-July; now cheaper to Far East and very cheap in Europe & WCI.
But Brent market likely to clear with expectations of the AG sour loaders likely getting delayed.
Some Asia refiners are currently awaiting clarity on Hormuz but others are already acting (Sidi loads via Cape to SK).
In Asia there will be MORE demand for WTI, and also Mars, for Q4.
WTI/Brent widened rapidly upon Hormuz re-escalation and we expect the same again with ongoing Red Sea risks.
Brent is likely to clear out soon if WAF heads East and AG sours dry up.
WTI/Brent will still have to average narrower levels in H2, since US commercial crude inventory cannot be drawn forever.
Seasonality makes for some nuance; autumn turnarounds are ahead.
With the loss in global Medium-Sour supply, a US benefactor may be Mars.
Particularly given the underlying yield slate favouring diesel production.
November and December Mars / WTI diffs may likewise see gains.
But this is tempered by smaller volumes of exports and higher TAN limiting appetite from some Asian buyers.
