- Platts AGS strengthens against forward Dated Brent
- US crude exports to fall on week on lower flows to Asia: cFlow
Platts American Gulf Coast Select, while assessed stronger against both the 15 to 45 day-forward NYMX WTI and Dated Brent strips on July 1, weakened against WTI MEH amid a sharp narrowing in the Brent/WTI strip.
Against the forward NYMEX WTI strip, Platts AGS, which represents Midland-spec WTI crude for export out of the US Gulf Coast on an FOB basis, was assessed just 1 cent stronger July 1 at a $6.91/b premium to cash WTI. Against the forward Dated Brent strip, Platts AGS strengthened 32 cents off its all-time low differential to a $2.71/b discount. On an outright basis, Platts AGS was assessed at $112.87/b, or a $2.89/b premium to August WTI MEH, down from a $3.30/b premium from the day prior. While the Platts AGS outright value can appear strong against WTI MEH, sharp backwardation in the market structure and a large portion of the assessment strip encompassing July loading dates pulls up the strip average.
The first-decade August loading portion of the Platts AGS strip was assessed just $1.10 over August WTI MEH. This came as the Brent/WTI swaps spread, one indicator of the competitiveness of US crude on the international market, narrowed 81 cents to $3.33/b. As the swaps spread narrows, WTI-based crudes are often considered as becoming less competitive in relation to their Brent-based counterparts, thus applying downward pressure on values.
Meanwhile, US crude exports over the week ended July 1 were expected to have fallen from the week prior to 2.697 million b/d, according to Platts cFlow ship and commodity tracking software from S&P Global Commodity Insights. This was down more than 1 million b/d from cFlow’s estimate for the week prior, while down nearly 700,000 b/d from the US Energy Information Administration reported level for the week ended June 24.
The overall fall in US export volumes appears largely driven by a decrease in flows to Asia. Data from cFlow estimated crude exports to Asia over the week ended July 1 at just 620,000 b/d, down from over 1.8 million b/d of export flows in the week prior. Flows to Europe were estimated to hold steady at 1.2 million b/d. These values are subject to some change as data is further analyzed.