North Sea crude has seen significant support from anticipated market tightness, while Mediterranean, West African and US crude differentials suffer from competition.

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After Forties length had kept pressure on North Sea crude differentials through much of September, buying interest has surged as market participants expect tightness.

Demand for Brent Blend, Forties, Oseberg and Ekofisk has been demonstrated in the Platts Market on Close assessment process through the week beginning Oct. 3.

As a result of increased buying interest, the Dated Brent differential has more than doubled through October so far.

Platts, part of S&P Global Commodity Insights, assessed the Dated Brent differential -- which is added to the North Sea strip to calculate the Dated Brent benchmark value -- at $1.615/b Oct. 4, up from 80 cents/b Sept. 30.

"We [have been] just limping though French strikes and turnarounds before we get hit by the perfect storm," one trader said Oct. 4, suggesting that limited availability is imminent.

The end of refinery turnarounds, Russian crude sanctions, anticipated OPEC+ production cuts, potential CPC Blend disruption, high freight costs and increased runs in China are all expected to occur almost simultaneously, causing significant market tightness.

Kazakhstan's CPC Blend has been beset by loading disruptions since the invasion of Ukraine in March. More recently, the October program is set to average 1.06 million b/d in October, significantly shorter than the 12-month average loadings for CPC of 1.33 million b/d due to a number of issues at the terminal and maintenance at the upstream fields. Two of the three single-point moorings are unusable due to recently discovered defects.

"Market fundamentals alone look positive as runs increase...I'd imagine the crude market has the potential to look pretty tight in a month's time," a second trader said Oct. 4.

While the concerns around availability have brought buying interest to North Sea grades, Mediterranean and West African light sweet crudes are feeling the pressure.

WAF floods into Europe

For West African crudes, underwhelming tender demand from Asian refineries has left significant volumes of November-loading crude aimed at an already well-supplied European market.

"Eastern pull hasn't really materialized in the way people were hoping which is leaving too much oil pointed at Europe," one West African crude trader said.

November trade has progressed at a sluggish pace with sellers still trying to allocate some October overhang cargoes. Around 10 million October barrels were still unsold, Oct. 3, another trader said.

Meanwhile, WAF barrels have struggled to compete, in particular losing out to Latin American barrels in Europe and US WTI Midland in recent Indian tenders. Strikes at several French refineries have also suppressed outright demand, traders said.

A crowded European is also likely to spell difficulty for Angolan crudes that have been increasingly reliant on Europe as Chinese demand has receded through the year. Angolan exports to Europe and China were at parity in September at around 385,000 b/d, Kpler shipping data showed.

Angolan exports to Europe have not exceeded those to China since October 2015.

Med crude under pressure

As more West African barrels head to Europe, length has built up in the Mediterranean putting pressure on regional differentials.

On the medium sweet side, West African barrels heading to Europe have put a lid on premiums for distillate-rich grades in the Med. Azerbaijan's Azeri Light has been steadily assessed by Platts at around a $4.75/b premium to Dated Brent, with deals down from the peaks of $8/b heard by traders in September.

For lighter grades, sentiment has turned firmly bearish as lackluster demand outweighs the light sweet supply disruption.

"The picture is quite long in Europe," said a Mediterranean crude trader, adding there was pressure on WTI, Algeria's Saharan Blend, CPC Blend and lighter grades from Libya.

This view was echoed by a second Mediterranean trader stating that CPC Blend was likely to see a differential retracement despite the supply disruptions as the price had risen too high resulting in "killing demand." CPC Blend was last assessed at a $1.20/b discount to Dated Brent Oct. 4.

Sellers have expressed concern as they await the new loading programs with buyers taking less crude and sourcing alternative barrels from West Africa and WTI.

"Offers are much lower now than where they were this time last week and look likely to move lower still," said the second Mediterranean trader, expressing a clear downside risk ahead of the November trading cycle.