The appreciations of Mediterranean oil over Brent have diminished in the past few days as refiners from Europe turn for alternatives with lower prices such as Russian Urals and other crudes. The price for Russia’s crude oil increased above $2/barrel last week after July loading plan showed a 45% decline in exports from Baltic ports from June but slowly back in significant pace since then. Crude oils from the Urals differentiate to eased below $1.50 in Northwestern Europe on average this week, down $0.80/barrel from a week ago. Cargoes with prompt loading dates being traded at a profit below $1/barrel, as market participants concealed.
Sellers sees refiners are planning to leave Russian grades altogether, and they had to stay with unsold barrels or limit their demand. European refiners foresee Ural oil loadings to be weak in July after demand surge in Russian gasoline in the previous month, forced producers to fulfil domestic markets. The exports have also been cut by the OPEC+ reduction deals. With this state, refiners seek alternatives available in the market, U.S oils at the most, or Angolan and Nigerian crude. European trader market even disclosed that they seen sour refineries take sweet crude oil as it is cheaper.
Kazakhstan’s CPC Blend, Caspian grades and Azerbaijan’s Azeri BTC have also lowered against dated Brent from recent multi-year records. Azeri BTC is down by $ 0.70/barrel while CPC Blend down by $1/barrel this week. A trader with refiner in the Mediterranean market opined that the market got overheated after quick shift from oil flood to a deficit in supply, and after this market will find balance.
