For all the market chatter about a disappointing summer for crude oil (flat price) and refined products, Dated Brent certainly did not get the memo. Amid continuous physical bids from Totsa, physical differentials held up at $2/bbl into the end of August, and longs would have certainly been well rewarded. It wasn’t just the usual Forties and Midland that were competitive; Oseberg and Ekofisk got some of that action too. Merci Beaucoup! The herd mentality was ever-present in the rallies, and the bullish momentum was boosted by the occasional futures rally. Supply disruption fears out of Libya initially triggered panic buying from refineries, but these fears were justified once headlines were released about oilfields shutting down. Continuous draws in US stocks reduced export availability, and East Asia was the destination of choice rather than Europe, which has propped up the WTI/Brent spread. However, the Northern Hemisphere summer is over, and we think the bull party is coming to a close.
