The North Sea Dated Brent benchmark crude differential fell to the lowest level in almost two-and-a-half years Wednesday, as sellers showed increasingly competitive offers for April barrels.
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The Dated Brent differential was assessed at minus $1.025/b Wednesday, from minus $0.825/b the previous day. Dated Brent hadn't been assessed this low since November 2015, when it briefly dipped below minus $1.20/b, according to S&P Global Platts data.
Market participants had expected the BFOE crude complex to firm going into May, as European refiners return from maintenance with rising feedstocks requirements, while Asian refiners were heard to show improved appetite for North Sea barrels.
However, prompt indicators continued to reflect a gloomy April market, which sources attributed to a lack of buying.
"I think there is a bit of a lack of eastern demand at the prompt, and refiners are covered -- people just don't seem to have interest," a trader said.
"People are probably covered forward though the Dated curve suggests a recovery comes soon," a second trader said.
"[The market] seems to be pricing a recovery [for May], I don't think it's really sloppy, just pricing weak," the first trader added.
In the Platts Market on Close assessment process Wednesday, Vitol lifted a Brent Blend cargo loading April 16-18 offered by BP at Dated Brent minus $1.35/b.
Market participants said the grade had not been seen trading this low in the past several years.