Dated Brent assessed at 18-year low amid falling demand, oversupply concerns

London — S&P Global Platts' key Dated Brent benchmark was assessed at an eighteen-year low Monday as an oversupplied market combined with contracting global demand continued to put pressure on crude differentials and competitive offers were seen in the Market on Close assessment process.

Platts assessed Dated Brent at $22.195/b Monday, down $3.185/b day on day.

This is the lowest Dated Brent has been assessed since March 6, 2002, when it was assessed at $22.15/b.

This is down 56.91% from March 5, after which the bearish headlines began to emerge in the global market.

The pressure on physical North Sea crude differentials comes amid the lack of an agreement between OPEC and its allies which will likely result in a significantly over supply in the market while refineries look to cut runs due to contracting global product demand as a result of the coronavirus pandemic.

"[The market is pricing] that we are oversupplied by 10-20 million barrels per day," one trader said.

Oseberg and Forties set the Dated Brent differential Monday, which fell 33.5 cents on the day to minus $1.73/b. This is the lowest the differential has been assessed since at least May 2013, Platts data showed.

Platts assessed Oseberg at a 31 cents/b discount to Dated Brent Monday, down 29.5 cents compared to the previous assessment. According to Platts data, this is the lowest the differential has been assessed since June 22, 2015 when the differential was assessed at minus 32 cents/b.

In the Market on Close assessment process Monday, both Vitol and Glencore offered cargoes of Oseberg.

Vitol offered Oseberg parcel 0401 loading April 7-9 at a discount to Dated Brent of 40 cents/b, while Glencore offered parcel 0402 loading April 13-15 at a discount of 15 cents/b. Both offers were left outstanding at the 1630 London close.

Vitol previously bought parcel 0401 from Equinor in the MOC on March 19 at a discount to Dated Brent of 5 cents/b.

The Forties differential to Dated Brent was assessed at minus $1.65/b Monday, down 65 cents/b day on day, its lowest value since December 24, 2008, when it was also assessed at minus $1.65/b, Platts data shows.

Mercuria bought Forties parcel F0406 loading April 14-16 from Trafigura in the MOC Monday at a discount to Dated Brent of $1.65/b.