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Dated Brent differential gains nearly 30% Monday amid increased MOC buying interest

The Dated Brent differential — a component of the key Dated Brent crude benchmark — rose nearly 30% on Monday amid increased buying interest in the Platts Market on Close assessment process.

The differential was assessed at minus $2.75/b Monday, up from minus $3.90/b on Thursday, the last trading day before a long weekend in the UK.

Trafigura was seeking cargoes of Brent Blend, Forties and Ekofisk loading across various dates in late-May and into June in the MOC Monday. The bids for the three grades reached discounts to Dated Brent of $2.35/b, $2.30/b and $1.75/b respectively and were all left outstanding at the 1630 London close.

The buying interest comes at a time when product cracks and refinery margins are finding some support from easing European lockdowns, although multiple cargoes of Dated Brent basket grades continue to float in the North Sea as a result of the limited demand over the last couple of months.

Light sweet crudes were struggling to find homes through April and into May as a result of poor jet fuel and gasoline margins, but market participants have been noting an uptick in demand for regional North Sea grades from end-users as European lockdowns start to ease.

“[There is] definitely much better demand, and a bit lower supply. But I would look at the gasoline crack for your main rationale,” a source said.

Statfjord and Gullfaks differentials, for example, were heard to have risen to small premiums to Dated Brent over recent days as barrels look to be taken into refining systems, traders said.

While the slight uptick in demand is easing some concerns regarding continued bearish pressure in the market, many traders continue to look at the sheer overhang of both crude and product supply globally and how long it could take for those volumes to clear.

“I think there is plenty [of North Sea crude] available out there at the moment — the refineries will likely get fed by floating barrels,” one trader said Tuesday.
Source: Platts

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