Dated v Brent

The spread between Crude Oil benchmarks for physical cargo loading windows (Dated Brent) and the most liquid benchmark (Brent).

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Dated Brent Report – Strength in Chaos

The Brent futures market was taut in anticipation and volatility last week as the leak of intelligence about the, at the time, looming Israeli strike on Iran meant that the waiting game would have to continue, and there were fewer clues. The front spreads have been rangebound over the fortnight, and the DFL market has superseded this, allowing for the Dated-to-Lead (DFL vs Brent spreads) structure to swing up. The question for spreads is whether they see the support from the Dated structure ripple through the DTL reverting, or whether the anticipated heavy pressure in the futures structure will strike through the structural integrity of the curve. The physical differential dropped to around 5c on 17 Oct and has gently been implied higher since.

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Dated Brent Report – It’s choppy in the North Sea!

The North Sea is choppy as we enter October, and choppiness dominated the Dated Brent market this fortnight, with few signs of this ending. In the last report, the physical diff was strong above a dollar, with a Chinese bull play holding strength and bidding was seen in a few grades. 20 Sep seemed a turning point for the market with BP offering Brent, although PI lifted this. The following week (23-27 Sep) saw strong selling from the US, with Exxon offering Forties and ConocoPhillips offering Ekofisk, with Ekofisk key to setting the curve currently. This US offering helped the phys diff be implied at less than a dollar on 25 Sep and, combined with futures selling, Dated took a dive. In October, following a fairly weak expiry, there is decent strength held in the Dated complex, as PI flipped to selling the diff fell to 65c, where it has been implied steadily. The past few windows have been pretty quiet. PI has stopped its buying and US selling is quieter. The waters are choppy and not so busy.

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Dated Brent Report – Any Last Sellers?

September has been a month of many firsts in Brent futures: for one, the benchmark crude futures contract collapsed below $70/bbl on 10 Sep for the first time in three years. Soon after this feat, ICE COT data for the week ending 10 Sep reported that players were net short the Brent futures complex for the first time on record. Despite this weakness, Dated Brent and Dated differentials were shielded from the bears, with the physical differential briefly dropping to just above $0.99/bbl on 09 Sep to then rising to $1.275/bbl on 16 Sep. This relative support emerged due to strong buy-side forces present in the market. On 06 Sep, we saw Chevron offering WTI Midland across the curve, only for Totsa to lift the offer. Afterwards, we saw Gunvor and Petroineos buying Ekofisk and Midland cargoes, respectively, with BP and Glencore on the sell side.

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Dated Brent Report – EFP-redicting a sell off?

The chasm between the reality of demand sentiment and the crude oil futures markets, by extension, and the continued relentless buying in the North Sea physical seems to have been driven even wider this fortnight. Oct’24 EFP continues to price relatively weakly on partials, pointing to a squeeze in the physical rather than genuine demand. Fundamentally, margins continue to struggle with product weakness, although the lower flat price lent a touch of support.

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Dated Brent Report – Totsa, It’s Hammer Time

All hell broke loose this week as the Bears came in with a bang. The Dated Brent market was not immune to the chaos that ran amok global financial markets at large. The poor US jobs reading was the tinderbox that catalysed the worldwide sell-off, and a bloodbath ensued. For our readers outside of Japan, it is one less bowl of ramen or can of Strong Zero on your upcoming trip to the land of the rising sun as investors unwound their carry trades, prompting a mass exodus from the Nikkei.

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Dated Brent Report – When The Music Stops

What goes up, must come down, and it really feels like we have reached an inflection point in Dated Brent, or inflexion point as the Americans spell it. As usual, it is all eyes on America, and what the changing political tides will mean for the oil market, geopolitics, and the financial markets at large. But that is a discussion reserved for Q4. The Dated Brent market is all about the here and now, and that is what we will focus on.

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