BY CONTINUING TO USE THIS SITE, YOU ARE AGREEING TO OUR USE OF COOKIES. REVIEW OUR
COOKIE NOTICE

Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Oil

Feature: Europe to see big rise in US crude oil imports in Feb

Bunker Fuel | Containers | Dry Freight | Marine Fuels | Tankers

How will shipping deal with higher fuel costs from IMO 2020?

Natural Gas | Oil

Platts Scenario Planning Service

Oil | Refined Products | Fuel Oil | Shipping | Dry Freight | Marine Fuels | Tankers

Mediterranean Bunker Fuel Conference, 8th Annual

Oil

Germany monitoring oil supplies closely as Russian pipeline outage drags on

Feature: Europe to see big rise in US crude oil imports in Feb

Highlights

CPC and Urals under pressure from competitive US offers

North Sea crude heading to East offers opportunities for US in NWE

London — The volume of US crude oil arriving into Europe, which has been rising of late, will pick up sharply in February, pressuring values for North Sea and Mediterranean grades.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

"There are a lot of US barrels coming over and landing in February, more than [has been seen in the past couple of months] due to Asia not pulling as much in the near future due to turnarounds," a crude trader said.

"It is going to massively affect the balance of crude and affect North Sea and Urals."

Trading and shipping sources estimated that 800,000-850,000 b/d of US crude will arrive into Europe in February, with the majority headed to Northwest European refineries, although a sizeable volume will go to Mediterranean destinations.

While the main crude grade continued to be light, sweet WTI Midland, sources said naphtha-rich Eagle Ford and medium sour Mars have also been offered to refineries.

Aside from refinery maintenance in Asia meaning some US crude has to find another home, other reasons for the rise in US crude flows to Europe include more supportive freight rates and the knock-on effect of long, weather-related delays transporting Black Sea-loaded oil through the Turkish straits.

Those ongoing delays have led to buyers looking elsewhere.

Earlier this month, three VLCCs were said by sources to have been placed on subjects to ship US crude to Europe.

US crude rarely moves to Europe in VLCCs, and the trend only started on December 24 when the VLCC Olympic Lady left Corpus Christi Lightering for Rotterdam.

Indeed, European refiners typically prefer Aframax-size cargoes and, to a certain extent, Suezmaxes which offer more flexibility than the larger VLCCs.

The Brent-WTI spread -- assessed at $8.55/b at the London close Wednesday-- has been less of a factor as it has largely remained within an $8.00-$10.50/b range since early September, S&P Global Platts data showed.

As for shipping costs, Aframax rates on the US Gulf Coast-UK Continent route have cooled down somewhat since early January. Platts assessed the route at Worldscale 115 Wednesday, down from a peak at w192.50 late last year.

London Oil & Energy Forum | London Hilton | February 25, 2019

Join our respected editors and analysts as they share insights on the latest oil and energy industry developments, market outlooks and in-depth analysis of major trends.

Register now

CPC AND URALS UNDER PRESSURE

The arrival of US crude has affected Kazakhstan's CPC Blend and Russia's Urals crude, which have started to see an impact on demand for February cargoes, trading sources said.

In Northwest Europe, medium sour Urals -- which differs in quality from most of the US grades, with WTI Midland not considered as a direct competitor -- has remained near multi-year highs even as the fuel oil crack has lost some of its previous strength, leading some refineries to consider running a sweeter crude slate.

"There has been some switching due to the flurry of US cargoes heading our way. WTI Midland is being offered at quite aggressive levels," one Urals crude trader said.

Meanwhile, CPC Blend in the Mediterranean has been facing headwinds from the Turkish straits delays, traders said. With US cargoes not facing those issues, some buyers have increased their US crude intake in February. As a result, CPC Blend will likely command lower prices in February.

"We see a lot of US grades coming and it will change dramatically the market in NWE and Med...CPC is already such long program, in barrels per day. I think we will see a decline in the premium for February cargoes compared to January," a second trader said.

Urals in Northwest Europe was assessed at a 15.5 cents/b premium to the Mediterranean Dated strip Wednesday, while CPC Blend was assessed at a 70 cents/b discount to the Mediterranean Dated strip.

NORTH SEA ASIA ARB OPENS OPPORTUNITIES

In the North Sea, barrels clearing to the East were helping make space for US barrels, traders said.

"It seems an armada of crude is coming in in February and March from the US," a source said.

In both Northwest Europe, WTI Midland was available around Dated Brent plus 15-30 cents/b for late February arrival, and market participants talked of slightly higher premiums in the Mediterranean.

BP bid for WTI Midland in the Platts Market on Close assessment process Wednesday, specifically for barrels landing in the first half of March. The bids, which were priced between Dated Brent flat and a 20 cents/b premium did not attract any sellers.

By comparison, North Sea's Forties was assessed at a 36.5 cents/b discount to the North Sea strip over the 10 days to month-ahead period, Wednesday.

--Gillian Carr, gillian.carr@spglobal.com

--Maude Desmarescaux, maude.desmarescaux@spglobal.com

--Edited by Dan Lalor, daniel.lalor@spglobal.com