- Platts AGS assessed at $62.43, highest premium to WTI MEH since late March
- Series of late April-loading VLCC's destined for China: Kpler
Platts American GulfCoast Select was assessed at $62.43/b on April 22, as the differential for the grade against the 15-45 day forward NYMEX WTI strip continued to strengthen, while against the forward Dated Brent strip, the grade was assessed weaker.
Against the 15-45 day forward NYMEX WTI strip, Platts AGS was assessed 2 cents/b stronger on the day at a $1.06/b premium to cash WTI, while against the forward Dated Brent strip, the grade was assessed 9 cents/b weaker at a $2.32/b premium.
A fall in the front-month differential for WTI MEH crude brought the assessed value for Platts AGS to a 20 cents/b premium to front-month WTI MEH, the largest premium since March 25, when Platts AGS was assessed at a 22 cents/b premium to WTI MEH.
Sources have noted that export economics play an important role for the value of WTI crude on the USGC as “the last barrel has to price for export and markets are balanced,” one market source said. The last least offer level for a May loading WTI FOB cargo out of the USGC was heard at a $2.20/b discount to July ICE Brent futures, while one brokerage source noted that the market for June loading cargoes is expected to kick-off more fully next week.
Looking at near-term flows, a series of China-destined VLCC fixtures for late April loading are slated to push up flows to the country, according to data from Kpler, a data intelligence company. While export flows to the country are not as high as those seen during 2020, particularly in May 2020, the country remains an important outlet for US crude exports.
Looking forward in the year, Platts Analytics expects US crude exports to be slightly lower in 2021 year-over year but retain a “strong presence” in the international market. Rebounding Permian production, which is already beginning to recover from lows seen in February, will push more barrels to the USGC for export, according to Platts Analytics.