Issue 23-7
consulting services
Friday
7 July 2023
Argus Crude and Refined Products Outlook
Summary
North Sea Dated forecast
„„There has been no major revision to our price forecast —
only a slight downwards correction in the short term.
„„We still see North Sea Dated averaging around $79/bl in
the third quarter and $83/bl in the fourth quarter.
Crude differentials
„„The glut of US WTI in Europe —which is now habitually
setting North Sea Dated’s price level — will continue to
weigh on light sweet prices in both northwest Europe and
the Mediterranean.
„„With Saudi Arabia announcing that it is extending its
1mn b/d unilateral crude production cut into August, and
Russia planning to curb its oil exports by 500,000 b/d next
month, medium sour strength is set to persist.
Near-term price drivers
Fundamentals
Sentiment
Macroeconomics
Product cracks and refining margins
„„High-sulphur fuel oil cracks, which have received support
from tighter supplies of heavier crude, will tighten the
residual fuel oil balance.
„„Gasoline blending demand for naphtha in the main hubs
has taken a downturn now that premium components are
becoming more expensive as we move into the summer
driving season, causing the blend value of sub-octane
naphtha to fall.
„„Middle distillate crack spreads strengthened across all
the main refining hubs in June, driven by supply tightness
that was particularly acute in Europe. As demand for the
product has remained weak, the European market is now
largely supply-driven and more sensitive to any changes in
diesel inflows from east of Suez.
Bullish
Bearish
▲S
audi Arabia could extend 1mn b/d additional cut into Septem-
▼Iranian crude production keeps rising
▲ Libyan exports might be disrupted by political instability
▼ US peak summer gasoline season disappoints
ber and beyond
▲ Saudi Arabia/Opec+ signal willingness to impose further production cuts, if necessary
▲ Hope that Chinese economic growth might accelerate
▼Venezuelan crude production ticks higher
▼ Diesel cracks in China are weak, suggesting that the economic
rebound is faltering
▲ India’s June manufacturing PMI at 57.8
▼ Weak June manufacturing PMIs in China, Europe and US
labour market
▼ BIS says fiscal tightening needed to augment monetary tightening
▲ Private payrolls and unemployment claims highlight strong US
▲ US 1Q23 GDP growth revised up to 2pc year on year
Petroleum
illuminating the markets®
▼ Central bankers hawkish at Sintra conference
▼ May US consumer spending up by 0.1pc on April
Available on the Argus Publications App
Argus Crude and Refined Products Outlook
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Issue 23-7 Friday 7 July 2023
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2
Overview
Opec+ oil ministers must be wondering what they need to
do. Despite highly supportive fundamentals, the market
continues to ignore their attempts to push prices higher, with
participants preferring instead to focus on the weak Chinese
recovery and the fear that some form of macroeconomic
meltdown lurks just around the corner.
Led by Saudi Arabia, Opec+ has become unusually proactive.
In the past, producers have tended to react to events, cutting
output only after prices have started to fall. Now the group is
prepared to act to head off any downward pressure. In October, Opec+ agreed to cut production by 2mn b/d, concerned
about a slowdown in oil demand growth in 2023. On that occasion, all member countries were part of the agreement. But
in April, with prices under pressure, another cut of 1.2mn b/d
was announced, this time involving just eight countries that
it seems did not bother to consult those not party to the
plan and that were presumably deemed irrelevant, since
they would not be able to contribute a cut in any case. More
recently, and acting alone, the Saudis have announced that
they will cut a further 1mn b/d in July and August. Russia has
also announced a further cut of 500,000 b/d, but this time to
exports, not production, and against an undisclosed baseline — generating sufficient ambiguity to leave the market
questioning whether any actual reduction in physical supply
will take place.
On our numbers, these latest cuts — and until we have
greater clarity, we are not factoring in any further reduction
in Russian supply — move the picture in the second half of
the year from the balanced position we previously envisaged
Chinese oil demand growth
mn b/d
1.0
0.8
0.6
0.4
0.2
0.0
-0.2
-0.4
— Argus Consulting
2016
2017
2018
2019
2020
.
Copyright © 2023 Argus Media group
2021
2022
2023
2024
2025
to a small deficit. Others — notably the IEA and Opec secretariat — see larger deficits developing.
Yet the market continues to refuse to price in this eventuality,
and values are still — from an Opec+ perspective — stubbornly weak. Judging from comments made by the Saudi oil
minister at the recent Opec seminar in Vienna, if prices fail
to move higher, further action will probably be taken. But he
also intimated that if demand growth does meet expectations — and a sizeable deficit opens up as a result — countries stand ready to raise production again.
In our view, demand growth will be at the lower end of the
consensus. This year, global demand is forecast to grow
by 1.84mn b/d. China is key to this outlook, accounting for
0.9mn b/d of our increase — which, it is worth pointing
out, is well below the 1.5mn b/d rise that the IEA expects.
It has been clear for some time that China’s recovery from
lockdown has not been as robust as expected, and this was
reinforced by the official manufacturing purchasing managers index (PMI) for June, which at just 49 points indicates
contraction. Other pointers to weaker-than-expected demand growth in China include low levels of investment in the
real estate sector (15-20pc down on last year), May’s increase
in youth unemployment to a record 20.8pc, slower growth in
retail sales in May (up by 12.7pc on the year, against April’s
18.4pc rise), and weaker growth in industrial production in
May. More directly, there has only been a modest revival in
road and air traffic volumes this year, which are respectively
still some 70pc and 30pc below 2019 levels.
This gloomy clutch of economic indicators reinforces our
view that Chinese demand growth will be at the weaker end
of the market consensus this year. But we also question how
robust it will be further down the line. We currently forecast
growth of just 0.3mn b/d in 2024 and 0.2mn b/d in 2025 (see
graph) — despite potentially strong petrochemical feedstock demand growth as new capacity comes on stream.
Weak GDP growth is part of the reason. Construction activity
is likely to remain at a low ebb because of the real estate
bubble that has built up — although it is always possible that
Beijing will be prepared to tolerate a bigger bubble in order
to help absorb the large pool of unemployed, in which case
demand growth would probably be stronger. Also acting
as a drag on the outlook for demand is China’s ageing and
declining population.
Argus Crude and Refined Products Outlook
Summary of global oil balance
Demand
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Issue 23-7 Friday 7 July 2023
3
mn b/d
1Q22
2Q22
3Q22
4Q22
2022
1Q23
2Q23
3Q23
4Q23
2023
2024
2025
98.82
97.34
98.84
99.78
98.70
99.64
100.07
101.13
101.31
100.54
102.22
103.21
Supply
97.50
97.61
99.76
100.08
98.74
100.33
100.42
100.55
101.06
100.59
101.72
104.20
Opec crude
28.44
28.71
29.54
29.24
28.98
28.91
28.37
27.66
28.33
28.32
28.67
29.61
Opec NGL and condensate
5.17
5.17
5.17
5.17
5.17
5.32
5.32
5.32
5.32
5.32
5.46
5.73
Non-Opec crude and NGL
58.55
57.81
58.88
59.87
58.78
60.59
60.75
61.24
61.48
61.01
61.61
62.81
Other supply
Global balance*
5.34
5.92
6.17
5.80
5.81
5.52
5.98
6.34
5.93
5.94
5.98
6.06
-0.86
1.36
1.99
0.67
0.79
0.66
0.64
-0.58
-0.25
0.12
-0.50
0.99
*equivalent to global stock change
But more significantly, China is electrifying its vehicle fleet
at an astonishing pace. So far in 2023, more than 1.9mn new
plug-in electric cars have been registered in China, up by
more than a third on the year. Electric vehicles now account
for one third of new private vehicle sales. Over the last five
years, the number of private electric vehicles on the road has
increased by close to 800pc, and between 2023 and 2025 we
expect a further doubling in the size of the fleet. China’s oil
demand growth story could fast be coming to an end.
vehicles have been sold so far in 2023, up by over 60pc on
the year. Electric vehicles now account for 7pc of new vehicle
sales — double last year’s share. The size of the fleet has
increased by almost 300pc since 2018, and we expect it to
double again by 2025. In Europe, sales this year are close to
1mn, up by 20pc on the same period of last year and taking
a similar share of new car sales to that in the US. It is difficult
to escape the feeling that peak motor fuel demand in these
mature markets is close by — if not already here.
In the Atlantic basin, the demand outlook for 2023 is clouded
by the growing likelihood of recession in the second half of
the year. Steadily rising interest rates have helped push the
US Treasury yield curve to its deepest inversion since 1981.
An inverted curve happens when short-term interest rates
are higher than longer-term rates — the reverse is the norm
— and almost always signals that recession is around the
corner. The eurozone is already in mild recession.
On the supply side, non-Opec crude and NGLs production —
excluding countries that are part of the Opec+ alliance — is
now well above pre-Covid levels. This year, production has
been running 3.5mn b/d above the same period in 2019 (see
graph). This partly reflects a 600,000 b/d recovery in the US.
But in the US, it is notable that the increase is entirely driven
by NGLs. US crude production has yet to fully reattain preCovid levels, although the latest data show an unexpected
increase in crude production to 12.4mn b/d — only slightly
down on the record highs of early 2020. It is an unexpectedly
strong showing, given recent falls in rig counts and ongoing
capital discipline, perhaps hinting that US output could now
be trending higher than expected.
But again, like China, sales of electric vehicles in both the US
and Europe are surging. In the US, almost 260,000 electric
Change in non-Opec+ supply vs 2019
mn b/d
4
There are other supply-side considerations to confuse the
outlook. Iran has announced that its production is now running at over 3mn b/d — which is 200,000 b/d higher than assumed in the balance shown here — and there is once again
an expectation that some movement on sanctions relief
might be possible. In Libya, meanwhile, the security situation
has deteriorated to an extent that could jeopardise some
1mn b/d of exports. And then there is Venezuela, where production seems to be on the rise again.
3
— Argus Consulting
2
1
0
-1
-2
*excluding Opec+ participants
-3
May 23
Jan 23
Mar 23
Nov 22
Jul 22
Sep 22
May 22
Jan 22
Mar 22
Nov 21
Jul 21
Copyright © 2023 Argus Media group
Sep 21
May 21
Jan 21
Mar 21
Nov 20
Jul 20
Sep 20
May 20
Jan 20
Mar 20
-4
All told, it looks as if those Opec+ ministers will be kept on
their toes in the months ahead.
Argus Crude and Refined Products Outlook
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Issue 23-7 Friday 7 July 2023
Forecast crude prices
4
$/bl
Jun
Jul
Aug
Sep
3Q23
4Q23
2023
2024
2025
85.40
Ice Brent
74.98
77.70
80.30
81.30
79.80
83.30
80.80
86.30
Nymex WTI
70.27
72.90
75.80
77.30
75.30
79.30
76.10
82.30
81.40
North Sea Dated
74.73
77.80
80.00
81.00
79.60
83.00
80.50
86.00
85.00
Urals fob Primorsk
51.80
56.30
59.10
60.90
58.80
63.00
54.40
65.40
64.30
Urals Aframax fob Novorossiysk
52.56
57.00
59.50
61.30
59.30
63.40
55.00
65.90
64.80
Kebco cif Augusta
75.42
78.80
80.60
81.30
80.20
83.40
80.00
85.20
84.00
Johan Sverdrup
75.27
79.80
80.90
81.60
80.80
83.60
80.80
85.90
84.90
Saharan Blend
74.55
77.80
80.10
81.10
79.70
83.40
80.90
86.30
85.20
BTC Blend
78.30
82.10
83.20
84.00
83.10
86.50
84.20
89.20
88.30
CPC Blend
72.51
76.00
78.20
79.20
77.80
81.50
78.20
84.20
83.20
Qua Iboe
75.81
78.70
80.70
81.70
80.30
83.60
81.40
87.10
86.40
Dalia
73.63
78.00
79.00
79.70
78.90
81.30
79.10
84.90
84.10
Girassol
76.30
79.80
81.90
83.10
81.60
85.20
82.20
87.60
86.90
WTI Midland
71.62
74.90
77.90
78.40
77.10
80.10
77.40
83.10
82.00
WTI Houston
71.83
75.10
78.10
78.70
77.30
80.30
77.60
83.30
82.30
Mars
70.62
75.00
77.20
77.40
76.50
79.00
75.80
80.90
79.50
WCS Hardisty
59.10
62.30
66.40
68.50
65.70
71.20
63.40
73.40
73.20
77.40
WCS Houston
67.08
70.70
74.00
74.90
73.20
76.90
70.90
78.80
Vasconia
70.17
73.40
75.90
76.80
75.40
78.50
74.90
80.30
79.10
Dubai
75.02
77.80
80.10
81.20
79.70
82.30
80.00
85.10
83.30
Murban
75.72
78.00
80.30
81.50
79.90
83.20
80.80
86.40
85.30
ESPO Blend
51.80
56.30
59.10
60.90
58.80
63.00
54.40
65.40
64.30
Jun
Jul
Aug
Sep
3Q23
4Q23
2023
2024
2025
Forecast crude differentials
Ice Brent vs North Sea Dated
Urals fob Primorsk vs N Sea Dated
Urals Novo vs Urals Primorsk
Urals fob Novo vs N Sea Dated
$/bl
0.25
-0.10
0.30
0.30
0.20
0.30
0.30
0.30
0.40
-22.93
-21.50
-20.90
-20.10
-20.80
-20.00
-26.10
-20.60
-20.70
0.76
0.70
0.40
0.40
0.50
0.40
0.60
0.50
0.50
-22.17
-20.80
-20.50
-19.70
-20.30
-19.60
-25.50
-20.10
-20.20
Kebco cif Augusta vs N Sea Dated
0.69
1.00
0.60
0.30
0.60
0.40
-0.50
-0.80
-1.00
Johan Sverdrup vs North Sea Dated
0.54
2.00
0.90
0.60
1.20
0.60
0.30
-0.10
-0.10
Saharan Blend vs North Sea Dated
0.20
-0.17
0.00
0.10
0.10
0.10
0.40
0.40
0.30
BTC Blend vs North Sea Dated
3.58
4.30
3.20
3.00
3.50
3.50
3.70
3.20
3.30
CPC Blend vs North Sea Dated
-2.22
-1.80
-1.80
-1.80
-1.80
-1.50
-2.30
-1.80
-1.80
Qua Iboe vs North Sea Dated
Dalia vs North Sea Dated
Girassol vs North Sea Dated
Nymex WTI vs Ice Brent
1.08
0.90
0.70
0.70
0.70
0.60
0.90
1.10
1.40
-1.10
0.20
-1.00
-1.30
-0.70
-1.70
-1.40
-1.10
-0.90
1.57
2.00
1.90
2.10
2.00
2.20
1.70
1.60
1.90
-4.70
-4.80
-4.50
-4.00
-4.50
-4.00
-4.70
-4.00
-4.00
WTI Midland vs Nymex WTI
1.35
2.00
2.10
1.10
1.80
0.80
1.30
0.80
0.60
WTI Houston vs Nymex WTI
1.56
2.20
2.30
1.40
2.00
1.00
1.50
1.00
0.90
Mars vs Nymex WTI
0.34
2.10
1.40
0.10
1.20
-0.30
-0.30
-1.40
-1.90
-11.18
-10.60
-9.40
-8.80
-9.60
-8.10
-12.70
-8.90
-8.20
WCS Houston vs Nymex WTI
-3.20
-2.20
-1.80
-2.40
-2.10
-2.40
-5.20
-3.50
-4.00
Vasconia vs Nymex WTI
-0.11
0.50
0.10
-0.50
0.10
-0.80
-1.20
-2.00
-2.30
Dubai vs Ice Brent
0.04
0.10
-0.20
-0.10
-0.10
-1.00
-0.80
-1.20
-2.10
Murban vs Ice Brent
0.74
0.30
0.00
0.20
0.10
-0.10
0.00
0.10
-0.10
-23.22
-21.50
-21.00
-20.30
-20.90
-19.30
-25.60
-19.70
-19.00
WCS Hardisty vs Nymex WTI
ESPO Blend vs Dubai
Copyright © 2023 Argus Media group
Argus Crude and Refined Products Outlook
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Issue 23-7 Friday 7 July 2023
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5
Macroeconomics and financial markets
A six-month run that has seen equities rise by 16pc might
be drawing to an end. The S&P 500 is on course to close the
week down by 1pc as investors digest last week’s hawkish narrative from central bankers meeting in Portugal. The
message was loud and clear — not only are further rate rises
to come in the months ahead, but higher rates could be
sustained until mid-2024 or beyond. Policy rates in the US,
eurozone and UK are now converging on 5pc, a level unseen
since 2007 in the US and 2008 in Europe.
are also spilling over into the upstream oil and gas sectors,
with the latest Dallas Fed Survey pointing to persistent cost
pressures and concerns over reduced access to credit among
smaller E&P companies and service providers. Stubborn
inflation and increasingly embedded interest rate expectations are reflected in a US Treasury yield curve that has been
inverted now for fully nine months — a metric that historically has been a bellwether for US recessions, albeit with a
9-12 month lag.
China, meanwhile, is loosening rates in an effort to light a fire
under what has been a disappointing recovery, following the
dismantling of its zero-Covid restrictions. And Turkey seems
finally to be discarding its counter-intuitive monetary loosening, while inflation flirts with a 40pc annual rate.
The message from Opec+ ministers meeting in Vienna this
week was that they too would continue to curb liquidity on
a crude market threatened with imminent Atlantic basin — if
not global — economic downturn. Anyone expecting Saudi
Arabia to forcefully switch to protecting its Asian market
share against the major inroads being made by Russian exports to the region will have been disappointed.
This week’s June manufacturing purchasing managers’ index
(PMI) data did little to brighten the gloom, with the US,
Europe, China and much of the rest of Asia remaining in contraction. Only India, among the top-tier economies, showed
much sign of resilience, with a healthy manufacturing PMI
reading of 57.8. No surprise, therefore, that Indian crude
imports remain elevated, including around 2mn b/d from
Russia, helping to sustain the relative strength in medium
sour values.
With core inflation in the Atlantic basin still stubbornly high
— augmented by rising wage claims and still-high government spending — the Bank of International Settlements has
intimated that tighter fiscal and monetary policy will be required to bring inflation under control. Inflationary pressures
Thousands
Net speculative length
800
Managed money (Brent & WTI, '000 contracts)
Ice Brent ($/bl, RHS)
130
120
700
— Ice, Nymex, Argus
600
100
500
90
400
80
300
70
200
60
100
0
29 Dec 20
110
50
15 Jun 21
30 Nov 21
Copyright © 2023 Argus Media group
17 May 22
01 Nov 22
18 Apr 23
40
The Saudis announced that their extra unilateral 1mn b/d
production cut will be extended from July into August,
while Russia too has pledged a 500,000 b/d export cut for
next month. Some idea of how baked-in the idea of pending recession is, however, can be gleaned from the fact that
these normally bullish pronouncements from the Opec+
grouping’s two heavyweights barely moved the needle, with
Ice Brent struggling to escape the $75/bl tether already constraining it a week ago.
Expectations of weakening economic activity, and an associated drop in potential oil demand growth, are disincentivising the holding of oil inventory at the margin. OECD
oil stocks progressively loosened during 2022, but have
tightened again this year.
The downbeat economic outlook has also underpinned a
sustained reduction in speculative net length in crude derivatives contracts. There is a reinforcing feedback loop here
from the sharply rising cost of capital. This, too, tends to
mitigate against discretionary inventory holding, while also
raising the cost of posting margin on paper markets.
Opec+ will have to work hard to sustain a $75/bl floor for
crude in the second half of 2023 if the long-awaited recession arrives. But low levels of physical and paper market
inventory hold the potential for a sharp upward correction in
the event of any unforeseen bullish fundamental surprises.
Argus Crude and Refined Products Outlook
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Issue 23-7 Friday 7 July 2023
6
Crude futures analysis
Last month in these pages we asked whether a further oil
production cut from Opec+ was likely to follow the one
announced on 2 April, given the continuing weak global economic outlook. After all, the immediate $6.62/bl Brent price
rise that followed the announcement in April of a 1.65mn b/d
cut had dissipated by 26 April, and by the end of May Brent
had lost another $7.21/bl.
The Saudi oil minister duly resumed his battle with shortselling speculators by announcing on 4 June a unilateral
Saudi 1mn b/d cut for July — subsequently extended to
August. The minister declared that his action was “not a toy
… not a joke. This is a market that needs stabilisation”. Time
will tell whether he is right or wrong regarding the remark
about stabilisation. What is clear is that Brent hardly reacted
to the second Saudi move to punish the speculators, and by
26 June Brent had declined to $73.86/bl. Perhaps the Saudis
should bear in mind the economist J M Keynes’ remark that
“blaming speculators is not far removed intellectually from
ascription of cattle disease to the evil eye”. It must be said,
though, that there was an increase in the intensity of speculation on both Nymex and Ice from mid-May, raising the
question of whether the speculators were reacting rationally
to oil price weakness or causing the weakness in the first
place (see graph). As ever, our analysis of changes in open
interest ought to help provide some answers.
Oil consumers and producers face varying oil prices and have
views about where they are heading. Both can reduce price
uncertainty by hedging on futures exchanges, for which the
speculators help provide liquidity, as do the swap dealers,
Global stock cover vs forward curve structure
Global oil commercial stock cover (days, LHS)
Ice Brent M3-M1 ($/bl, RHS)*
65
8
4
55
2
0
50
-2
45
-4
-6
40
-8
− Ice, Argus
*projections based on 3 July 2023 forward curve
35
Jan 19
Jan 20
Jan 21
Jan 22
Copyright © 2023 Argus Media group
Jan 23
Jan 24
Between 23 May and 27 June — a period during which the
Saudis declared their unilateral 1mn b/d crude production
cut for July — spot WTI declined by $2.23/bl (3.1pc). Despite
this modest drop in the key US benchmark price, there were
significant changes in certain open interest positions on Nymex (see graph). The consumer hedgers increased their longs
by 38mn bl (7pc), presumably rushing to secure low-cost
oil on the understanding that the impending Saudi cut in
Nymex WTI: Changes in open interest positions mn bl
6
60
who offer bespoke hedging facilities to consumers and producers, and in turn hedge their positions on the exchanges.
Underlying the multitude of price perceptions are oil market
fundamentals, reflected in a key indicator like global commercial stock cover. The greater the cover provided, the lower the benchmark oil price tends — other things being equal.
Although the true level of global oil inventories is not known,
all is not lost because a measure of stocks can be obtained
by taking the flow difference between global oil supplies
and demand, and then benchmarking the implied inventory
changes on an assumed level of stocks at an arbitrary moment, having already deducted government strategic stocks.
The level of cover influences not just spot oil prices, but also
the relationship between futures prices moving forward. As
our graph shows, when global commercial cover is high, the
third month minus the first month price is positive (contango), and vice versa when it is negative (backwardation). The
rise in stock cover from April 22 led to a switch from heavy
backwardation to a shallower one this year, with the North
Sea market even dipping into contango recently. Although
cover is now expected to decline, a recent North Sea forward
curve does not reflect this.
-10
— Nymex
Changes from 23/05/2023 to 27/06/2023
Net other reportables*
Net commercials*
Net money managers*
Net swap positions*
Other reportables shorts
Other reportables longs
Money M shorts
Money M longs
Swap shorts
Swap longs
Commercial shorts
Commercial longs
-70
-50
-30
-10
10
30
50
*Note: Swap dealers are hugely net short; commercials, money managers and other reportables are net long.
70
Argus Crude and Refined Products Outlook
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Issue 23-7 Friday 7 July 2023
July would make oil costlier. At the same time, the producer
hedgers increased their short positions slightly (by 4mn bl,
or 1pc), leading to a substantial 35mn bl (99pc) increase in
the hedgers’ net long positions. For their part, the money
managers boosted their shorts by a colossal 69mn bl (64pc),
which in conjunction with a modest 6mn bl rise in their longs,
led to a massive 63mn bl fall in their net long positions. For
the speculators on Nymex to increase their short positions
by so much suggests a huge bear play in defiance of the
Saudi oil minister’s price objectives. The Saudis will have cut
their oil production by 1.5mn b/d between May and July,
which when added to the ongoing loss of 0.45mn b/d of Iraqi
Kirkuk exports that has resulted from Baghdad’s dispute
with the KRG, should have raised expectations of higher, not
lower, oil prices and led to big increases in the speculators’
longs. That the Nymex money managers chose to engage in
a counter-intuitive bear play obviously contributed to a steep
rise in our WTI speculation intensity index below.
The reactions of some market participants on Ice to an
equally modest $1.55/bl (2.1pc) decrease in spot Brent over
the period was very different (see graph). The money managers/speculators on Ice increased their longs (by 14mn bl,
6pc) and decreased their shorts (by 20mn bl, 22pc), boosting their net long positions by 34mn bl (24pc) in what the
Saudi minister would have considered a logical response to
the kingdom’s policy of constraining production. Increasing longs and decreasing shorts can only be ascribed in the
circumstances to expectations of profits from future price
rises (taking the Saudi minister’s bait) and profit taking,
respectively. In the nine-week period prior to 23 May, the
correlation between the net money managers’ longs and
Brent was at 88pc, but by the week ending 27 June, the same
Ice Brent: Changes in open interest positions
mn bl
— Ice
Changes from 23/05/2023 to 27/06/2023
correlation had turned negative (-28pc), suggesting that the
modest weakness in Brent during June was not because of
the money managers, although as our graph shows speculation intensity on Ice was higher.
Two other significant changes occurred on Ice. The swap
dealers reduced their longs by 31mn bl (9pc) in a drive to
restrict their losses on futures bought at higher prices to
cover their fixed-price sales to consumers. For their part, the
‘other reportables’ acted this time more as speculators, some
increasing their long positions in expectation of gains from
price rises — as indeed the Saudis wanted them to believe
would happen — and others raising their shorts, but by half
the change in longs, in anticipation of oil price falls.
Whether or not speculative pressures drive oil prices has
become a matter of concern for Saudi Arabia, with its oil
minister blaming the short sellers in the futures markets for
recurring oil price weakness. As has already been pointed
out, it is difficult to attribute weakness in the Brent spot market during June to money manager-led speculation, although
as our graph shows there was a modest rise in the Drollas
speculation intensity index for Brent. This increase was more
likely the result of raised speculative activity among the
so-called ‘other reportables’. Where there has been clear
evidence of a sharp increase in speculation intensity is in the
WTI market. Driving this has been a massive increase in the
short positions of the money managers on Nymex, who obviously expect oil prices to weaken, but it must be borne in
mind that WTI spot prices weakened only slightly during the
period to 27 June. Actual spot prices will be determined in
due course by the level of stock cover, which market fundamentals will eventually set.
Speculation intensity indexes for Brent and WTI
11
Net other reportables*
10
Net commercials*
9
Net money managers*
Speculation intensity index for Brent (2Jan18=1, left axis)
Speculation intensity index for WTI (2Jan18=1, right axis)
3.0
6
Other report. longs
Money M shorts
2.5
5
Money M longs
2.0
4
Swap shorts
1.5
3
Swap longs
1.0
2
Commercial shorts
0.5
1
Commercial longs
-40
-30
-20
-10
0
10
20
30
40
*Note: commercials and other reportables are net short; money managers and swap dealers are net long.
Copyright © 2023 Argus Media group
50
0
Oct'22
4.5
3.5
7
Other reportable shorts
5.0
4.0
8
Net swap positions*
7
− Drollas
Nov'22
Dec'22
Feb'23
Mar'23
May'23
Jun'23
0.0
Argus Crude and Refined Products Outlook
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Issue 23-7 Friday 7 July 2023
8
Northwest Europe
North Sea benchmark crudes — Brent, Forties, Oseberg, Ekofisk and Troll — came under pressure last month as robust
light sweet crude supplies depressed light sweet values.
Key North Sea light grades vs Dated
Oseberg
12
Ekofisk
$/bl
Forties
10
8
6
North Sea Dated = 0
4
2
0
-2
-4
-6
Jan 2019
Jan 2020
Jan 2021
Jan 2022
Jan 2023
Falling Forties’ prices led to the first Asia-bound VLCC shipment of the light sour grade in over six months as eastbound
arbitrage economics improved. The Brent-Dubai EFS — Ice
Brent’s premium to Dubai swaps and a key measure of the
west-east arbitrage — narrowed to an average of $1.90/bl
in April and May, when the majority of June-loading cargoes would have traded. This was down from $2.47/bl in
March and the lowest since early 2021. The lower EFS makes
North Sea barrels more affordable for Asia-Pacific buyers. In
another sign that the light sweet prompt market is oversupplied, Ice front-month Brent futures dipped below the
fourth-month contract from 27 June to 30 June, putting the
curve in contango for the first time since January. The freight
rate to take a VLCC to east Asia — which touched a threemonth high in mid-June, before retreating — did not seem to
be significantly hindering eastbound flows.
to remain well supported in Europe and elsewhere in the Atlantic basin, thanks to Opec+ cuts and the sanctions-driven
diversion of Russian Urals to Asia.
Norway’s medium sour Johan Sverdrup hit a 10-month high
in June, averaging a 54¢/bl premium to Dated, drawing extra
support from higher Saudi official selling prices and Opec+
production cuts. This week, Johan Sverdrup cargoes loading in August were discussed at premiums of up to $3.70/bl
fob Mongstad. This is despite the fact that exports of Johan
Sverdrup — now by far the largest stream in the North Sea
— are scheduled to rise by 3pc in August to a record 774,000
b/d. Norway’s state-controlled Equinor, which operates the
field, said it performed a successful test in May, confirming
an increased capacity of 755,000 b/d — up by 35,000 b/d.
The Johan Sverdrup schedule lists 22 cargoes, including six
VLCCs and three Suezmaxes. The presence of VLCC cargoes
in the programme would usually indicate that sellers expect
the eastbound arbitrage to be open, but recent tracking data
suggest this correlation has been broken. No VLCCs loaded
in May and June, when a combined 11 were scheduled to sail.
The recent strong gains in Johan Sverdrup values probably
make the grade less appealing to buyers in Asia-Pacific anyway — despite the narrowing EFS.
And with Saudi Arabia announcing that it is extending its
1mn b/d unilateral crude production cut for July into August,
and Russia planning to curb its oil exports by 500,000 b/d
next month, medium sour strength is set to persist.
Johan Sverdrup and Forties vs Dated
Forties
5
$/bl
Johan Sverdrup
4
3
Exports of the five North Sea benchmark grades are scheduled at a 14-month low of 565,000 b/d in August, but the
glut of US WTI in Europe, which is now habitually setting
North Sea Dated’s price level, will still weigh on light sweet
prices in northwest Europe.
The fact that the Brent-Dubai EFS even moved to a discount
on 28 June — its first since late 2020 — showed the relative
strength of Asian sour crude markets against the west last
month. Medium and heavy sour crude cargoes are forecast
Copyright © 2023 Argus Media group
2
North Sea Dated = 0
1
0
-1
-2
-3
-4
-5
-6
Jan 2019
Jan 2020
Jan 2021
Jan 2022
Jan 2023
Argus Crude and Refined Products Outlook
|
|
Issue 23-7 Friday 7 July 2023
9
Mediterranean
Light sour CPC Blend’s discount to North Sea Dated narrowed by 45¢/bl to $2.20/bl in June. Discounts fluctuated in a
$1.85-2.50/bl range, but improving economics for long-haul
eastbound shipments lifted Asia-Pacific buying interest and
values. The front-month Brent-Dubai EFS — or the premium
of Ice Brent to Dubai swaps — averaged $1.09/bl in June,
down from May’s $1.90/bl and the lowest EFS full-month
average since January 2021.
Mediterranean light crude diffs vs Dated
$/bl
BTC Blend cif Augusta
Saharan Blend fob Algeria
Es Sider fob Libya
CPC Blend cif Augusta
12
10
8
Kazakh medium sour Kebco is continuing to trade at a premium to Dated, with most recent values heard at $1/bl above
the benchmark on a cif Augusta basis. Sour crude values in
Europe and beyond are strong after Saudi Arabia announced
that it is extending its 1mn b/d unilateral production cut
for July into August, while Russia said it plans to cut its oil
exports by 500,000 b/d next month. There have been no
exports of Iraqi medium sour Kirkuk Blend from the Turkish
port of Ceyhan since late March. And European high-sulphur
fuel oil has strengthened, reflecting the lack of Russian cargoes and demand for high-sulphur residues from refineries
in the Mediterranean to use as feedstock in the absence of
heavy sour crude.
6
4
2
0
-2
-4
North Sea Dated = 0
-6
-8
-10
Jan
2019
Jul
2019
Jan
2020
Jul
2020
Jan
2021
Jul
2021
Jan
2022
Jul
2022
Jan
2023
Azeri light sweet BTC Blend’s premium to North Sea Dated
also rose, but by a more modest 16¢/bl to $3.60/bl for the
month. Values for Algerian Saharan Blend gained ground,
but remained at an average discount of 18¢/bl to Dated as
exports were down by nearly 15pc from May. The rise in
differentials for light sweet grades could reflect the fact that
they offer European refiners a short-haul option at a time of
rising freight costs, particularly from west Africa.
Europe is a key outlet for Nigerian sweet crudes, but freight
rates for the route have increased after Nigeria’s new government issued multi-million dollar fines to shipowners for
back taxes. European refiners could have opted for regional
options to offset exposure to any volatility. Improving eastbound arbitrage economics also strengthened differentials
for July-loading supplies. Price gains for Saharan Blend and
CPC Blend were likely to have been capped, however, by
weak naphtha crack spreads and ample availability of competitively priced US WTI delivered into Europe. But overall
differentials for all these Mediterranean grades should find
support in July-August because of the peak summer demand
season in Europe.
Copyright © 2023 Argus Media group
Any disruption to Libya’s crude exports could also boost the
value of Mediterranean grades. The Government of National
Stability, based in the east, is threatening to stop the flow of
oil unless it can appoint an official to oversee state-owned
NOC’s finances. Three quarters of Libya’s 1.2mn b/d of
production and five of its nine export terminals are in the
east. Exports have been running at around 1mn b/d since
July 2022, when the most recent blockade — orchestrated
by eastern-based Khalifa Haftar, head of the Libyan National
Army — was lifted. Renewed disruption to exports would
deprive Mediterranean refiners in particular of an alternative
to Russian medium sour Urals. Libya’s light sweet Es Sider
— the country’s largest export stream — has become a key
replacement for Urals since the EU ban on Russian seaborne
crude imports took effect in December. Mediterranean refiners have taken 60pc of Libya’s exports this year.
Med medium sour diffs vs Dated
0
$/bl
North Sea Dated = 0
-5
-10
-15
Kebco cif Augusta
-20
Kirkuk fob Ceyhan
-25
Urals Med Aframax fob Novorossiysk
-30
-35
-40
Jan
2019
Jul
2019
Jan
2020
Jul
2020
Jan
2021
Jul
2021
Jan
2022
Jul
2022
Jan
2023
Argus Crude and Refined Products Outlook
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Issue 23-7 Friday 7 July 2023
10
US
Nymex WTI’s (Cushing) discount to Ice Brent widened last
month to $4.70/bl, out from $4/bl in May. In July, the discount has widened further to almost $5/bl.
Nymex WTI vs Ice Brent
0.0
$/bl
Ice Brent = 0
-1.0
-2.0
-3.0
-4.0
WTI Houston’s premium to Nymex WTI widened by 60¢/
bl last month, despite tepid demand from Asia-Pacific and
a build in US inventories. US Gulf coast refining activity
has ramped up as the summer driving season gets into full
swing, with Padd 3 refinery utlisation at above 90pc. Asian
buyers have not bought any cargoes beyond their base
requirements for US crude. Naphtha margins in Singapore
deepened their discount against Dubai last month and have
remained depressed, reducing Asian refiners’ call on light
sweet crude. But Asian buying of WTI could pick up as China
has recently granted new crude quotas to refiners — the
third tranche of the year — amounting to 455mn bl.
-5.0
-6.0
-7.0
-8.0
Jan 2022
Apr 2022
Jul 2022
Oct 2022
Jan 2023
Apr 2023
Both light sweet crude benchmarks came under pressure last
month amid ample supplies, but the US benchmark fell more
sharply, as stocks at Cushing, Oklahoma, are now more than
double year-ago levels, at 43mn bl. Robust light sweet crude
supplies also depressed prompt WTI below forward deliveries, with the month 1 to month 2 spread averaging minus
17¢/bl in June, having been at parity in May.
Furthermore, the Brent-WTI spread now seems to be influenced more by transatlantic transport costs as the inclusion
of WTI in the Dated Brent benchmark has spurred US GulfEurope flows.
US secondary benchmarks vs Nymex WTI
5.0
WTI Houston
WTI Midland
$/bl
Mars
Saudi Arabia’s 1mn b/d reduction in July crude output has
helped to support US Gulf medium sour prices, with Mars
rising to a premium of 35¢/bl to Nymex WTI — its first
premium to the benchmark in more than two years. The
purchase of 3mn bl of sour crude for the US Strategic Petroleum Reserve (SPR) also supported medium sours on the
Gulf coast. The US Department of Energy has said it plans to
resume refilling the SPR in October-November, but did not
say how much it will buy. Administration officials have said
the SPR could be replenished by as much as 13mn bl through
to the end of 2023, and the refill should continue to support
US Gulf coast sours.
Canadian heavy sour WCS and Colombia’s medium sour
Vasconia should also hold up well against Nymex WTI as
demand for heavier grades on the US Gulf coast is high amid
strong HSFO cracks and as Opec+ production cuts have
tightened heavy sour supplies globally.
Canadian and Colombian grades vs Nymex WTI
WCS Hardisty
10
WCS Houston
Vasconia
5
3.0
0
1.0
-5
Nymex WTI = 0
Nymex WTI = 0
-10
-1.0
-15
-3.0
-20
-25
-5.0
-7.0
Jan 2022
-30
Apr 2022
Jul 2022
Copyright © 2023 Argus Media group
Oct 2022
Jan 2023
Apr 2023
Jan
2019
Jul
2019
Jan
2020
Jul
2020
Jan
2021
Jul
2021
Jan
2022
Jul
2022
Jan
2023
$/bl
Argus Crude and Refined Products Outlook
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Issue 23-7 Friday 7 July 2023
11
Asia-Pacific
Mideast Gulf medium sour benchmark Dubai strengthened
relative to Ice Brent in June, reaching parity with the light
sweet international benchmark, thanks to Saudi Arabia’s announcement on 4 June that it will cut production by an extra
1mn b/d in July.
Dubai* vs Ice Brent
$/bl
1.0
0.0
Ice Brent = 0
-1.0
-2.0
-3.0
-4.0
-5.0
*London close
-6.0
Jan 2022
Apr 2022
Jul 2022
Oct 2022
Jan 2023
Apr 2023
The front Brent-Dubai exchange of futures for swaps (EFS)
— or the spread between Ice Brent futures and Dubai swaps
— fell to a discount of 8¢/bl at Singapore’s market close on
28 June. This was the first time since November 2020 that
the EFS has been at a discount. The Brent-Dubai EFS had
been narrowing through June, and averaged $1.089/bl for
the month as a whole. So far in July, the EFS is even lower,
averaging less than $1/bl.
Dubai’s strength against Atlantic basin sweet crude benchmarks is set to continue in the months ahead as the extra
1mn b/d unilateral cut from Saudi Arabia has now been
extended into August. Russia has now also pledged a
500,000 b/d reduction in its crude exports next month.
The extra Saudi reduction is likely to continue to roll over
month by month through to the end of the year. And given
that Saudi cuts typically hit hardest at the country’s mediumheavy sour production — which tends to fetch less than
lighter Saudi grades — Dubai and similar medium sours
should remain well supported. And with the peak demand
season well under way in the Middle East, Saudi crude
exports will in any case be running at a lower level, as more
crude is used domestically for direct burn in desalination
plants and other facilities.
Copyright © 2023 Argus Media group
The Dubai forward curve remains firmly backwardated,
whereas the Ice Brent and Nymex WTI curves have fluctuated
between contango and backwardation in recent weeks —
another sign that light sweet grades are in relative oversupply, whereas medium sours are well supported.
The Dubai backwardation held largely steady in June, with
the premium of the front-month contract to the third-month
contract averaging $1.01/bl, compared with an average premium of $1.06/bl for the front-month to third-month Dubai
contract in May. As a result, refiners in Asia-Pacific were
expecting Saudi Aramco to keep its official formula prices for
August-loading crude unchanged from July.
But Aramco bucked expectations again and raised its August
formula prices for its medium and heavy crude exports to
Asia Pacific. It hiked the prices for Arab Light, Arab Medium
and Arab Heavy by 20¢/bl each from July. By contrast, the
light sour Arab Extra Light price was left unchanged from
July, while Arab Super Light was cut by 40¢/bl from the
previous month, reflecting the valuation gap between lighter
and heavier grades that we addressed above. The difference
between the grades’ official selling prices is also reflective
of weak light distillate crack spreads, especially for naphtha,
while HSFO cracks have been gaining strength. And after its
announcement on 3 July of the production cut’s extension
to August, Aramco is also trying to discourage incremental
demand from Asia-Pacific, where refining capacity is back on
line after maintenance and where China has recently issued
more crude import quotas to independent refiners.
Brent-Dubai EFS
13.0
$/bl
$/bl
11.0
9.0
7.0
5.0
3.0
1.0
Dubai swap M2 = 0
-1.0
05 Jul 22
05 Oct 22
05 Jan 23
05 Apr 23
05 Jul 23
Argus Crude and Refined Products Outlook
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Issue 23-7 Friday 7 July 2023
12
Light distillates
Gasoline crack spreads strengthened across the four main refining hubs in June. In northwest Europe, the spread rose by
$2.59/bl from May to $24.13/bl. In the first half of the month,
ARA stocks fell to their lowest since November 2022 —
10.82mn bl. This reflected import demand down the Rhine as
a result of scheduled refinery maintenance in Germany. But
as German product output increased once plants started to
come back on line at the beginning of June, import demand
weakened, and this was reflected in ARA stockbuilds in the
second half of the month.
On the US Gulf coast, cracks rose by $1.56/bl to $23.16/bl
in June, supported by higher demand. Domestic demand in
June was up by 1.9pc on the month, but still more than 3pc
down on 2019 levels, according to EIA weekly data. Over the
same period, gasoline output exceeded 10mn b/d — topping
this mark for the first time since 2019 — while imports were
up by 9.4pc on the month and sitting at a two-year high,
driven by receipts from Europe. As a result, stocks rose for
the first time in three months, by 1.5pc, over the period.
In Singapore, the crack spread increased by $1.50/bl compared with May, averaging $17.28/bl in June. Cracks peaked
at $20.73/bl on 12 June, when cyclone Biparjoy led Indian
private-sector refiner RIL to declare force majeure on all oil
product loadings. Prices were also supported by planned
and unplanned refinery outages across the region. But any
bullish sentiment is likely to prove short-lived — refineries
will be coming back on line and Chinese gasoline exports
are expected to have been high in June and to stay high this
ARA gasoline stocks
month as a result of weak domestic demand and revived
refinery output.
Naphtha cracks in northwest Europe and Singapore continued to weaken in June, mainly on weak petrochemical
demand and increased supply. Naphtha’s discount to crude
in northwest Europe widened to $13.40/bl from $10/bl, and
to $17.90/bl from $12.70/bl in Singapore.
The weakness in both markets is also reflected by increased
supplies, particularly as Russian naphtha has been largely
unaffected by sanctions. Russian flows have been redirected
away from Europe to Asia, which took 68pc of all Russian exports in June. But with naphtha cracks in Asia falling so low,
there is less incentive to take product that probably contains
Russian naphtha. Reports of the G7-led product price cap
being more strictly enforced could curb flows into the region,
but we do not see this having a big impact on margins, given
that petrochemical demand is so patchy.
Gasoline blending demand in the main hubs has also taken
a downturn now that premium components are becoming
more expensive as we move into the summer driving season,
causing the blend value of sub-octane naphtha to fall. But we
have seen more support for heavy naphtha, which reached
premiums of over $10/bl in Europe, Asia and the US in June.
Heavy naphtha is often used to make reformate, a highoctane gasoline blending component.
Light distillates crack spreads
mn bl
$/bl
May
Jun
Jul
Aug
Sep
-10.06
-13.37
-16.80
-16.70
-12.10
21.54
24.13
24.30
22.40
18.90
-13.20
-16.15
-20.70
-19.40
-14.90
18.07
22.81
23.90
22.00
17.30
Northwest Europe vs Dated
13.0
Naphtha 65 para
95R gasoline
12.5
Mediterranean vs Kebco cif Augusta
12.0
Naphtha 65 para
11.5
US Gulf coast vs WTI Houston
11.0
87 conv gasoline (ex RVO)
95R gasoline
Naphtha
2.09
0.44
1.10
-0.80
0.00
21.60
23.16
23.10
22.30
16.60
-12.25
-18.01
-19.30
-19.50
-15.00
Naphtha Japan c+f
-8.70
-15.10
-16.10
-16.60
-12.40
95R gasoline
15.79
17.28
15.90
15.40
14.00
Singapore vs Dubai
10.5
10.0
Jan 23
Naphtha
— Insights Global
Feb 23
Mar 23
Copyright © 2023 Argus Media group
Apr 23
May 23
Jun 23
Argus Crude and Refined Products Outlook
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Issue 23-7 Friday 7 July 2023
13
Middle distillates
Middle distillate crack spreads strengthened across all the
main refining hubs in June, driven by supply tightness that
was particularly acute in Europe. The diesel crack spread in
northwest Europe increased by $5.50/bl on the month to
$22.70/bl in June. As demand for the product has remained
constantly weak, the European market is now largely supplydriven and more sensitive to any changes in diesel inflows
from east of the Suez.
Diesel crack spreads
100
$/bl
NWE vs NSD
90
Mediterranean vs Kebco
80
USGC vs LLS
70
Singapore vs Dubai
60
50
40
30
20
10
0
2020
2021
2022
2023
2024
Diesel crack spreads started to weaken after peaking in
March as Europe managed to secure alternative supplies
from the Mideast Gulf, India and the US while increasing
domestic refinery runs. This helped ease fears of a shortage,
which had spurred a stockbuild ahead of the EU embargo
on Russian diesel and supported cracks. As inventories have
stayed at a comfortable level, the European market might
have reached a delicate balance between weak demand and
new supplies — at least until mid-June, when this equilibrium
was disrupted by tightening supply.
Europe’s receipts of diesel from the Middle East and India
slowed in June because of poor export economics in May.
These volumes stayed in Asia-Pacific instead, with the diesel
crack spread also rising in Singapore as a result of turnarounds. Russian diesel exports were also undermined by refinery maintenance between early May and mid-June, further
constraining the global supply pool. The volume of diesel
arriving in the EU from the Middle East and India dropped by
180,000 b/d from May to 545,000 b/d in June, Vortexa data
show. Coupled with unplanned refinery outages, supply in
Europe became tighter from mid-June.
Copyright © 2023 Argus Media group
Supply started to rise with viable arbitrage economics,
which prompted flows from east to west of Suez. Indian
diesel loadings to Europe rose to around 350,000 b/d in the
second half of June from about 100,000 b/d in the first half
of the month. And Indian domestic demand is expected to
tail off because of the monsoon season, leaving more diesel
available for export. Similarly, weak demand in China and
improving export economics will encourage Chinese refiners
to export more diesel in July — Chinese diesel exports were
already rising towards the end of June. In addition, increasing volumes of Russian diesel have found their way to Brazil,
displacing US diesel cargoes to Europe. As a result, diesel
should remain in plentiful supply for European buyers —
subject to arbitrage viability.
Europe is unlikely to see a seasonal summer demand surge,
given weak economic indicators — the eurozone PMI registered a six-month low of 49.9 in June. Diesel wholesale
volumes in Germany, Europe’s largest diesel consumer, fell
by 7pc on the month to 1.4mn bl in June, and was well down
on 1.8mn bl in June 2021 and 2.1mn bl in June 2022. With demand poised to remain weak through summer, diesel prices
and cracks will probably take on a certain rhythm — supplies
from east of Suez responding to changes in European values,
and this, in turn, influencing prices and cracks in Europe.
Middle distillates crack spreads
May
$/bl
Jun
Jul
Aug
Sep
Northwest Europe vs Dated
Jet-kerosine
15.17
18.82
20.30
18.60
18.10
10ppm diesel
17.20
22.74
21.10
19.90
19.70
1,000ppm heating oil
13.65
19.12
18.30
17.10
17.20
Mediterranean vs Kebco cif Augusta
Jet-kerosine
12.56
16.58
17.20
15.70
15.40
10ppm diesel
15.86
21.50
19.50
18.60
18.50
1,000ppm heating oil
10.76
16.66
15.20
15.20
16.00
19.52
23.01
24.50
26.40
26.20
US Gulf coast vs WTI Houston
Jet-kerosine
10ppm diesel (ex-RVO)
2,000ppm heating oil
16.97
20.14
17.10
17.30
18.40
-15.01
-11.63
-10.30
-5.80
-3.20
14.08
15.04
14.00
11.60
11.40
Singapore vs Dubai
Jet-kerosine
10ppm diesel
14.64
17.29
15.20
12.90
12.90
500ppm gasoil
14.00
16.50
13.40
10.30
10.80
Argus Crude and Refined Products Outlook
|
|
Issue 23-7 Friday 7 July 2023
14
Fuel oil
High-sulphur fuel oil (HSFO) crack spreads against regional
benchmark crudes strengthened in Europe and on the US
Gulf coast in June, reflecting tighter product availability,
while HSFO cracks in Singapore remained weak as a result of
lower demand in east Asia.
Northwest Europe HSFO crack spread
$/bl
$/bl
North Sea Dated = 0
0
-5
-10
-15
-20
5-year range
2019
2020
2021
2022
2023
-25
-30
-35
-40
-45
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
In northwest Europe, HSFO’s discount to North Sea Dated
averaged $4/bl — the narrowest in nearly two-and-a-half
years. Cracks have been steadily rising since the embargo
on Russian products came into effect, with Europe struggling to replace lost volumes. Russia was the largest HSFO
supplier to the region before the ban. And fuel oil supplies
tightened even further in Europe in June as HSFO imports
from the Middle East slowed with the seasonal rise of Middle
Eastern consumption, with no cargoes leaving the region for
northwest Europe last month, according to Vortexa. Given
the recent Opec+ crude production cuts, some countries in
the Middle East might opt to burn more fuel oil for power
generation to meet seasonally stronger cooling demand,
rather than burning crude. Additionally, fuel oil exports from
Mexico dropped on the month, with no cargos heading to
northwest Europe in June — possibly as a result of refinery
problems. There were reports of at least four Mexican refinery fires during the last two months, including at Pemex’s
Madero, Salina Cruz, Minatitlan and Olmeca facilities.
Fuel oil output at European refineries has also fallen this year,
mainly as plants process less heavy crude. Residual fuel oil
production dropped by 122,000 b/d in January-May compared with the same period last year. During the summer
driving season, refiners will also probably prioritise upgrad-
Copyright © 2023 Argus Media group
ing HSFO into higher-value gasoline and middle distillates,
further squeezing HSFO supplies.
Another factor accelerating global supply tightness last
month was a rise in demand for secondary refinery feedstocks in China. Independents were scrambling to secure alternative non-crude feedstocks after customs checks curbed
diluted bitumen imports. Diluted bitumen is classified as a
refined product, and is favoured by independents looking to
circumvent caps on their crude imports. By late May, independents had nearly exhausted their crude import quotas,
and turned to high-sulphur straight-run feedstocks. With
Beijing issuing new crude import quotas in mid-June, Chinese fuel oil demand could weaken in the coming months,
which could weigh on HSFO margins. HSFO cracks in Europe
will probably retreat from June’s peak, but given how tight
the market is, they will continue to stay elevated until the
end of the summer season at least.
The US Gulf coast HSFO crack against WTI also strengthened
in July, averaging a $6.30/bl discount, in from minus $12.30/
bl in May. This was underpinned by lower HSFO imports,
which fell by 24pc to 273,000 b/d in June, with Mexican fuel
oil imports down by 8pc, according to Vortexa. And domestic residual fuel oil production waned in June, with the start
of the summer driving season. But refineries could ramp
up production to compensate for lower HSFO inflows from
Mexico. Overall, HSFO cracks are forecast to remain strong
over the summer period.
Fuel oil crack spreads
$/bl
May
Jun
Jul
Aug
Sep
Northwest Europe vs Dated
LSFO (1% sul)
HSFO (3.5% sul)
-6.75
-3.88
-3.10
-6.50
-5.00
-10.58
-4.03
-7.00
-8.50
-9.30
-3.41
-0.66
0.50
-2.20
-0.50
-12.66
-10.72
-13.20
-15.80
-15.80
-2.28
3.70
1.10
0.00
-2.40
-12.28
-6.30
-8.90
-10.00
-12.40
Mediterranean vs Kebco cif Augusta
LSFO (1% sul)
HSFO (3.5% sul)
US Gulf coast vs WTI Houston
LSFO
HSFO (No 6 / 3% sul)
Singapore vs Dubai
HSFO 180cst
-6.91
-7.99
-7.50
-7.50
-8.50
HSFO 380cst
-7.45
-8.71
-9.20
-9.90
-10.40
Argus Crude and Refined Products Outlook
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|
Issue 23-7 Friday 7 July 2023
15
Refining margins
Refining margins across the four key regions rose in June, as
we forecast in our previous report. Indicator fluid catalytic
cracker (FCC) margins in northwest Europe and on the US
Gulf coast rose by more than we expected — $2.70/bl and
$1.85/bl, respectively — while the Singapore margin rose by
just 5¢/bl, which was much less than we projected.
have not increased substantially in recent weeks. Saras said
there was a risk that some of the works, which were initially
planned for March-June, would extend beyond the second
quarter. This has contributed to the Mediterranean margin
remaining above $4/bl in July, although we expect it to fall to
$2-3/bl for much of the remainder of the year.
Yield-weighted crack spread change: Jun vs May $/bl
Across the crude complex, medium and heavy sour crudes
have received support. The Opec+ production cuts have
tightened the global market for heavy sour crudes. In the US,
restocking should add 3mn bl of US-produced sour crude
to the Strategic Petroleum Reserve in September. These
supportive factors meant that Dubai, Johan Sverdrup, Kebco
and Basrah Medium were at premiums to North Sea Dated in
June — all had been at a discount in February.
6
5
Propane
Butane
Naphtha
Gasoline
Jet kero
Diesel/gasoil
HSFO
LSFO
Overall margin
4
3
2
1
0
-1
-2
NWE
Med
USGC
Singapore
For this report, we have introduced a Mediterranean refining
margin evaluated against Kebco. This provides a more meaningful insight into the performance of refineries in the region
than Urals, which we previously used as a benchmark crude
for the region. Italy has been a major importer of Kebco this
year, while Spain and Turkey have taken smaller volumes,
according to data from vessel-tracking firm Vortexa. Despite
being heavier and sourer than Brent, Kebco has been trading
at a $0.50-1.00/bl premium to North Sea Dated, reflecting
European demand for a crude to replace Russian Urals.
In the Mediterranean, the FCC margin to Kebco averaged
$4.15/bl in June. For context, the northwest Europe margin to North Sea Dated averaged $8/bl and the Singapore
margin to Dubai averaged $3.35/bl. The Mediterranean
margin against Kebco was up by $2.80/bl from May, supported by supply tightness as several refineries carried out
maintenance. Repsol reportedly spent €56mn ($61mn) during
a turnaround that began in May and which included work
to reduce CO2 emissions. The turnaround was, however,
reported to have concluded in the final week of June, and
product supply should return as a result.
Maintenance at Saras’ 300,000 b/d Sarroch refinery in Sardinia appears to be extending into July, as crude receipts
Copyright © 2023 Argus Media group
The impact of strong heavy-sour crude prices has not resulted in a worsening of refining margins when set against
margins for light sweet crudes. In June, the northwest Europe
margin to Johan Sverdrup — introduced in this month’s
report — averaged $3.90/bl, compared with an $8/bl margin
for North Sea Dated, a spread $4.10/bl. In February, that
spread was wider at $4.65/bl, which suggests that the medium sour margin has actually held up better. This probably
reflects the strength of high-sulphur fuel oil cracks, which
have received support from tighter supplies of heavier crude,
tightening the residual fuel oil balance.
Refining margins
$/bl
May
Jun
Jul
Aug
Sep
Northwest Europe
vs North Sea Dated
5.31
8.02
7.10
5.80
5.00
vs Johan Sverdrup
0.89
3.90
1.16
1.12
1.02
vs Kebco cif Augusta
1.36
4.15
2.62
1.24
0.86
vs CPC Blend
4.26
6.35
5.10
4.20
3.70
vs WTI Houston
5.09
6.95
7.20
8.00
7.40
vs Mars
2.27
5.03
2.40
2.60
1.60
Mediterranean
US Gulf coast
Singapore
vs Dubai
vs ESPO Blend
3.30
3.35
1.80
0.50
0.60
32.34
31.91
28.40
26.50
25.90
Gross refining margins calculated based on FCC unit yields
Argus Crude and Refined Products Outlook
|
|
Issue 23-7 Friday 7 July 2023
Forecast crude prices
16
$/bl
1Q23
2Q23
3Q23
4Q23
2023
1Q24
2Q24
3Q24
4Q24
2024
1Q25
2Q25
3Q25
4Q25
2025
Ice Brent
82.22
77.99
79.80
83.32 80.83
86.65
87.31
86.94
84.28 86.30
83.94
86.19
86.99
84.32
85.36
Nymex WTI
76.13
73.78
75.33
79.32
76.14
82.65
83.31
82.94
80.28 82.30
79.94
82.19
82.99
80.32
81.36
North Sea Dated
81.22
78.35
79.60
83.00 80.54
86.33
87.00
86.63
83.96
85.98
83.59
85.83
86.63
83.96
85.00
Urals fob Primorsk
43.71
52.21
58.81
62.97 54.42
65.75
66.70
66.17
63.16
65.45
63.15
65.08
65.83
63.10 64.29
Urals Aframax fob Novo
44.53
52.74
59.29
63.35 54.98
66.14
67.11
66.59
63.57
65.85
63.65
65.58
66.33
63.60
64.79
Kebco cif Augusta
77.30
79.14
80.22
83.44
80.03
85.75
85.90
85.61
83.58
85.21
82.56
84.43
85.53
83.43
83.99
Johan Sverdrup
80.30
78.67
80.77
83.59 80.83
86.40
86.50
86.26
84.33
85.87
83.68
85.37
86.23
84.14 84.86
Saharan Blend
82.54
77.78
79.66
83.42 80.85
86.61
86.94
86.57
84.90 86.26
84.26
85.68
86.47
84.48
BTC Blend
85.24
81.88
83.08
86.46
84.16
89.57
90.01
89.67
87.69
89.23
87.20
88.87
89.62
87.38 88.27
CPC Blend
77.69
75.82
77.79
81.46
78.19
84.59
84.97
84.55
82.70 84.20
82.12
83.70
84.52
82.44
83.19
Qua Iboe
82.63
78.95
80.35
83.59
81.38
87.46
87.93
87.54
85.44
87.09
85.35
87.04
87.68
85.34
86.35
Dalia
79.56
76.80
78.90
81.29
79.14
85.25
85.68
85.57
83.06 84.89
83.03
84.81
85.62
82.85 84.08
Girassol
82.14
80.02
81.60
85.16 82.23
88.13
88.13
87.64
86.38
87.57
86.08
87.36
87.82
86.29 86.89
WTI Midland
77.67
74.69
77.09
80.11
77.39
83.01
83.66
84.18
81.65
83.13
81.18
83.16
83.22
80.61 82.04
WTI Houston
77.91
74.90
77.30
80.32
77.61
83.22
83.87
84.39
81.86
83.33
81.39
83.37
83.43
80.82 82.25
Mars
74.34
73.32
76.54
79.01
75.80
81.30
81.93
81.33
78.86 80.85
78.44
79.95
80.78
78.90
WCS Hardisty
56.57
60.25
65.73
71.23 63.44
74.05
74.53
73.66
71.52
73.44
72.14
73.60
74.21
72.67
73.16
WCS Houston
64.83
68.74
73.20
76.86
70.91
79.42
79.90
79.03
76.88
78.81
76.43
77.89
78.50
76.95
77.44
Vasconia
73.82
72.05
75.36
78.51
74.94
80.44
81.63
80.93
78.05 80.26
77.70
79.96
80.55
78.32
79.13
Dubai
80.23
77.65
79.69
82.35
79.98
85.56
86.11
85.65
82.88
85.05
81.94
84.00
84.87
82.30
83.28
Murban
81.71
78.42
79.94
83.15
80.81
86.68
87.64
87.11
84.09 86.38
84.20
86.13
86.88
84.15
85.34
ESPO Blend
43.71
52.21
58.81
62.97 54.42
65.75
66.70
66.17
63.16
63.15
65.08
65.83
63.10 64.29
65.45
Forecast crude differentials
Ice Brent vs North Sea Dated
Urals fob Primorsk vs N Sea Dated
Urals Novo vs Urals Primorsk
Urals fob Novo vs N Sea Dated
85.22
79.52
$/bl
1Q23
2Q23
3Q23
4Q23
2023
1Q24
2Q24
3Q24
4Q24
2024
1Q25
2Q25
3Q25
4Q25
2025
1.00
-0.36
0.20
0.32
0.29
0.32
0.31
0.31
0.32
0.32
0.35
0.36
0.37
0.37
0.36
-37.51 -26.15 -20.79 -20.03 -26.12 -20.58 -20.30 -20.45 -20.80 -20.53 -20.44 -20.75 -20.80 -20.86 -20.71
0.82
0.54
0.48
0.38
0.55
0.39
0.41
0.42
0.42
0.41
0.50
0.50
0.50
0.50
0.50
-36.69 -25.61 -20.31 -19.65 -25.56 -20.19 -19.89 -20.04 -20.38 -20.12 -19.94 -20.25 -20.30 -20.36 -20.21
Kebco cif Augusta vs N Sea Dated
-3.92
0.78
0.62
0.44
-0.52
-0.58
-1.10
-1.01
-0.38
-0.77
-1.03
-1.40
-1.10
-0.52
-1.01
Johan Sverdrup vs North Sea Dated
-0.92
0.31
1.17
0.59
0.29
0.06
-0.50
-0.36
0.38
-0.11
0.09
-0.46
-0.39
0.19
-0.14
Saharan Blend vs North Sea Dated
1.33
-0.58
0.07
0.42
0.31
0.28
-0.06
-0.05
0.95
0.28
0.67
-0.15
-0.16
0.52
0.22
BTC Blend vs North Sea Dated
4.02
3.53
3.49
3.46
3.62
3.24
3.01
3.04
3.73
3.25
3.61
3.04
2.99
3.42
3.27
CPC Blend vs North Sea Dated
-3.53
-2.53
-1.81
-1.54
-2.35
-1.74
-2.03
-2.08
-1.26
-1.78
-1.47
-2.13
-2.11
-1.51
-1.81
Qua Iboe vs North Sea Dated
1.42
0.60
0.75
0.59
0.84
1.12
0.93
0.91
1.48
1.11
1.77
1.21
1.05
1.38
1.35
Dalia vs North Sea Dated
35.86
24.60
20.09
18.32
24.72
19.50
18.97
19.39
19.90
19.44
19.88
19.73
19.80
19.75
19.79
Girassol vs North Sea Dated
38.43
27.82
22.79
22.19
27.81
22.39
21.43
21.47
23.22
22.12
22.93
22.28
21.99
23.19
22.60
Nymex WTI vs Ice Brent
-6.08
-4.22
-4.46
-4.00
-4.69
-4.00
-4.00
-4.00
-4.00
-4.00
-4.00
-4.00
-4.00
-4.00
-4.00
1.54
0.92
1.75
0.79
1.25
0.36
0.35
1.23
1.37
0.83
1.24
0.97
0.22
0.29
0.68
1.78
1.13
1.96
1.00
1.47
0.57
0.56
1.44
1.58
1.04
1.45
1.18
0.43
0.50
0.89
-1.79
-0.45
1.21
-0.31
-0.34
-1.35
-1.38
-1.61
-1.42
-1.44
-1.51
-2.24
-2.21
-1.42
-1.84
WTI Midland vs Nymex WTI
WTI Houston vs Nymex WTI
Mars vs Nymex WTI
WCS Hardisty vs Nymex WTI
-24.64 -18.11 -13.87 -11.77 -17.10 -12.28 -12.47 -12.97 -12.44 -12.54 -11.45 -12.23 -12.42 -11.29 -11.85
WCS Houston vs Nymex WTI
-16.38
-9.61
-6.39
-6.14
-9.63
-6.92
-7.10
-7.60
-7.07
-7.17
-7.16
-7.94
-8.13
-7.01
-7.56
Vasconia vs Nymex WTI
-7.40
-6.30
-4.23
-4.49
-5.61
-5.89
-5.37
-5.70
-5.91
-5.72
-5.89
-5.87
-6.08
-5.64
-5.87
Dubai vs Ice Brent
-1.99
-0.34
-0.11
-0.97
-0.85
-1.09
-1.20
-1.29
-1.40
-1.24
-2.00
-2.20
-2.13
-2.02
-2.09
5.58
4.64
4.60
3.83
4.66
4.03
4.33
4.17
3.81
4.08
4.26
3.94
3.88
3.83
3.98
Murban vs Ice Brent
ESPO Blend vs Dubai
Copyright © 2023 Argus Media group
-36.52 -25.45 -20.88 -19.37 -25.56 -19.81 -19.40 -19.48 -19.72 -19.61 -18.79 -18.91 -19.04 -19.20 -18.99
Argus Crude and Refined Products Outlook
|
|
Issue 23-7 Friday 7 July 2023
Product prices
17
$/bl
1Q23
2Q23
3Q23
4Q23
2023
1Q24
2Q24
3Q24
4Q24
2024
1Q25
2Q25
3Q25
4Q25
2025
Northwest Europe
Naphtha 65 para
77.60
67.50
64.40
73.10
70.60
77.90
77.90
78.40
77.50
77.90
78.30
78.90
80.20
78.70
79.00
95R gasoline
96.80
99.90
101.40
97.00
98.80
96.20
100.10
100.70
92.50
97.40
93.50
99.50
99.60
92.50
96.30
Jet-kerosine
113.20
94.20
98.60
101.50 101.90
102.10
101.60
102.70
100.60 101.70
99.40
100.50
102.80
100.70 100.80
101.90 102.10
10ppm diesel
115.80
97.70
99.80
102.60 104.00
103.20
103.30
103.90
101.80 103.00
100.50
102.20
104.00
1,000ppm heating oil
111.00
93.90
97.10
99.20 100.30
101.00
101.10
101.20
98.30 100.40
98.30
100.00
101.30
98.40
99.50
LSFO (1% sul)
69.80
71.00
74.70
76.00
72.90
80.10
80.80
80.50
77.80
79.80
78.70
80.90
81.70
79.00
80.10
HSFO (3.5% sul)
61.40
69.00
71.30
71.70
68.30
75.50
75.10
76.40
73.00
75.00
72.30
75.30
77.70
75.00
75.10
73.60
64.70
61.90
70.30
67.60
76.10
76.30
77.00
75.90
76.30
76.40
77.20
78.80
76.90
77.30
95R gasoline
100.60
99.20
101.30
95.60
99.20
96.00
99.90
100.70
92.10
97.20
94.40
100.60
100.60
93.10
97.20
Jet-kerosine
110.20
92.20
96.30
98.90
99.40
100.70
100.30
101.60
99.30 100.50
98.00
99.20
101.70
99.40
99.60
10ppm diesel
115.10
97.20
99.10
101.60 103.30
102.10
102.30
102.90
100.30 101.90
99.50
101.20
103.00
1,000ppm heating oil
110.00
92.20
95.70
98.60
99.10
101.50
101.60
101.70
98.60 100.80
98.00
99.70
100.90
98.10
99.20
LSFO (1% sul)
74.70
75.20
79.50
80.80
77.50
81.80
82.10
81.50
79.20
81.10
80.40
82.10
82.70
80.40
81.40
HSFO (3.5% sul)
57.30
65.80
65.30
64.80
63.30
73.90
73.40
74.90
71.50
73.40
72.80
75.70
78.30
75.50
75.60
80.90
74.90
77.40
80.90
78.50
84.50
84.80
84.40
81.80
83.90
82.30
83.10
83.90
80.40
82.40
93.90
87.50
87.10
92.00
Mediterranean
Naphtha 65 para
100.40 101.00
US Gulf coast
Naphtha
87 conv gasoline (ex-RVO)
97.80
97.20
98.00
96.70
92.00
96.80
97.60
Jet-kerosine
126.10
95.70
103.00
105.10 107.50
101.20
100.60
103.30
10ppm diesel (ex-RVO)
113.10
93.30
94.90
98.90 100.00
99.00
99.30
81.60
61.70
70.90
82.60
74.20
87.10
87.20
2,000ppm heating oil
93.50
88.90
95.80
96.10
99.80 101.20
98.50
99.50
103.40
99.90 100.30
99.90
97.80
99.00
96.50
98.20
100.00
97.90
98.10
87.80
86.40
87.10
86.70
88.20
90.10
88.60
88.40
LSFO
73.60
74.20
76.80
77.30
75.50
87.80
86.20
86.80
84.50
86.30
80.80
80.30
83.50
79.90
81.10
HSFO ( No 6 / 3% sul)
57.00
64.20
66.80
67.30
63.90
77.80
76.20
76.80
74.50
76.30
74.70
76.40
78.00
76.50
76.40
Singapore
Naphtha
74.20
63.60
61.80
71.10
67.70
78.50
78.30
78.80
78.30
78.50
79.30
80.60
80.90
79.60
80.10
Naphtha Japan c+f
76.60
66.80
64.70
74.00
70.50
79.80
79.80
80.50
80.10
80.00
80.50
82.10
83.10
81.60
81.80
95R gasoline
98.90
94.20
94.80
94.40
95.60
92.90
100.40
100.80
90.30
96.10
94.40
99.40
99.60
93.20
96.60
Jet-kerosine
106.90
91.80
92.00
96.00
96.70
101.10
100.70
101.30
99.40 100.60
98.60
99.60
101.10
99.40
99.70
10ppm diesel
108.90
93.40
93.30
95.90
97.90
98.50
98.50
98.90
96.60
98.10
95.80
97.40
99.00
96.70
97.20
500ppm gasoil
105.50
92.30
91.20
93.80
95.70
97.30
97.20
97.40
95.40
96.80
94.60
96.10
97.40
95.40
95.90
HSFO 180cst
64.20
69.20
71.80
73.50
69.70
79.20
78.90
79.20
76.60
78.50
76.00
79.10
80.50
78.50
78.50
HSFO 380cst
62.20
68.80
69.90
72.10
68.20
77.90
77.20
78.10
75.50
77.20
74.80
77.40
79.40
77.50
77.30
Copyright © 2023 Argus Media group
Argus Crude and Refined Products Outlook
|
|
Issue 23-7 Friday 7 July 2023
Product crack spreads
18
$/bl
1Q23
2Q23
3Q23
4Q23
2023
1Q24
2Q24
3Q24
4Q24
2024
1Q25
2Q25
3Q25
4Q25
2025
Northwest Europe vs North Sea Dated
Naphtha 65 para
-3.60
-10.90
-15.20
-9.90
-9.90
-8.40
-9.10
-8.20
-6.50
-8.10
-5.30
-6.90
-6.40
-5.20
-6.00
95R gasoline
15.60
21.50
21.80
14.00
18.30
9.90
13.10
14.10
8.60
11.40
9.90
13.70
13.00
8.50
11.30
Jet-kerosine
32.00
15.90
19.00
18.50
21.30
15.70
14.60
16.10
16.70
15.80
15.80
14.70
16.10
16.70
15.80
10ppm diesel
34.60
19.30
20.20
19.60
23.50
16.90
16.30
17.30
17.80
17.10
16.90
16.30
17.40
17.90
17.10
1,000ppm heating oil
29.80
15.60
17.50
16.20
19.80
14.60
14.10
14.60
14.40
14.40
14.70
14.10
14.70
14.40
14.50
LSFO (1% sul)
-11.50
-7.30
-4.90
-7.00
-7.70
-6.20
-6.20
-6.10
-6.10
-6.20
-4.90
-4.90
-4.90
-4.90
-4.90
HSFO (3.5% sul)
-19.80
-9.40
-8.30
-11.30 -12.20
-10.80
-11.90
-10.20
-10.90
-11.00
-11.30
-10.60
-9.00
-9.00
-9.90
-13.20 -12.40
-9.70
-9.60
-8.60
-7.70
-8.90
-6.20
-7.20
-6.80
-6.50
-6.70
19.10
10.20
14.00
15.10
8.50
11.90
11.90
16.20
15.00
9.70
13.20
Mediterranean vs Kebco cif Augusta
Naphtha 65 para
-3.70
-14.40
-18.40
95R gasoline
23.30
20.10
21.10
12.20
Jet-kerosine
32.90
13.10
16.10
15.50
19.40
15.00
14.40
16.00
15.80
15.30
15.50
14.70
16.10
16.00
15.60
10ppm diesel
37.80
18.10
18.80
18.20
23.20
16.40
16.40
17.30
16.70
16.70
16.90
16.80
17.40
17.00
17.00
1,000ppm heating oil
32.70
13.10
15.50
15.20
19.10
15.70
15.70
16.00
15.00
15.60
15.50
15.30
15.40
14.60
15.20
LSFO (1% sul)
-2.60
-3.90
-0.70
-2.60
-2.50
-3.90
-3.80
-4.10
-4.40
-4.10
-2.20
-2.30
-2.80
-3.00
-2.60
-20.00
-13.30
-14.90
-18.70
-16.70
-11.80
-12.50
-10.70
-12.10
-11.80
-9.70
-8.70
-7.20
-7.90
-8.40
3.00
0.00
0.10
0.60
0.90
1.30
0.90
0.00
-0.10
0.50
1.00
-0.30
0.50
-0.40
0.20
87 conv gasoline (ex-RVO)
19.90
22.30
20.70
13.50
19.10
8.80
12.90
13.20
5.60
10.10
7.50
12.40
12.70
6.20
9.70
Jet-kerosine
48.20
20.80
25.70
24.80
29.90
17.90
16.80
18.90
17.90
17.90
17.10
16.20
20.00
19.10
18.10
10ppm diesel (ex-RVO)
35.20
18.40
17.60
18.50
22.40
15.80
15.40
15.50
15.90
15.70
15.10
14.80
16.60
17.00
15.90
3.70
-13.20
-6.40
2.30
-3.40
3.80
3.30
3.50
4.50
3.80
5.30
4.80
6.60
7.80
6.10
HSFO (3.5% sul)
US Gulf coast vs WTI Houston
Naphtha
2,000ppm heating oil
LSFO
HSFO ( No 6 / 3% sul)
-4.30
-0.70
-0.50
-3.00
-2.10
4.60
2.40
2.40
2.60
3.00
-0.60
-3.10
0.10
-1.00
-1.10
-20.90
-10.70
-10.50
-13.00
-13.70
-5.40
-7.60
-7.60
-7.40
-7.00
-6.70
-6.90
-5.40
-4.40
-5.80
-11.20 -12.30
Singapore vs Dubai
Naphtha
-6.00
-14.00
-17.90
-7.00
-7.80
-6.90
-4.60
-6.60
-2.70
-3.30
-3.90
-2.70
-3.20
Naphtha Japan c+f
-3.70
-10.80
-15.00
-8.40
-9.50
-5.80
-6.40
-5.10
-2.80
-5.00
-1.40
-1.90
-1.80
-0.70
-1.50
95R gasoline
18.70
16.60
15.10
12.10
15.60
7.30
14.30
15.20
7.40
11.10
12.50
15.40
14.70
10.90
13.40
Jet-kerosine
26.70
14.20
12.30
13.60
16.70
15.50
14.50
15.70
16.60
15.60
16.70
15.60
16.20
17.10
16.40
10ppm diesel
28.60
15.70
13.70
13.60
17.90
12.90
12.40
13.20
13.70
13.10
13.90
13.40
14.10
14.40
13.90
500ppm gasoil
25.30
14.70
11.50
11.50
15.70
11.70
11.10
11.70
12.50
11.70
12.70
12.10
12.60
13.10
12.60
HSFO 180cst
-16.10
-8.40
-7.80
-8.80 -10.30
-6.40
-7.20
-6.40
-6.30
-6.60
-5.90
-4.90
-4.40
-3.80
-4.70
HSFO 380cst
-18.10
-8.90
-9.80
-7.60
-8.90
-7.60
-7.30
-7.80
-7.20
-6.60
-5.50
-4.80
-6.00
Copyright © 2023 Argus Media group
-10.30
-11.80
Argus Crude and Refined Products Outlook
| Issue 23-7 Friday 7 July 2023
|
Refining margins
19
$/bl
1Q23
2Q23
3Q23
4Q23
2023
1Q24
2Q24
3Q24
4Q24
2024
1Q25
2Q25
3Q25
4Q25
2025
vs North Sea Dated
9.40
5.60
6.00
3.50
6.10
1.30
1.60
2.90
1.90
1.90
1.70
2.20
3.00
2.30
2.30
vs Johan Sverdrup
5.10
1.40
1.10
-0.10
1.90
-1.30
-0.90
0.40
-0.80
-0.70
-0.70
-0.10
0.70
-0.20
-0.10
9.20
1.90
1.60
-0.80
3.00
0.90
1.20
2.50
1.10
1.40
2.60
3.20
4.00
2.90
3.20
13.50
4.70
4.40
2.50
6.30
2.00
2.20
3.50
2.10
2.50
2.80
3.30
3.90
2.80
3.20
15.80
5.90
7.50
7.80
9.30
3.00
3.60
4.40
2.40
3.30
3.10
3.90
5.60
3.90
4.10
6.80
3.20
2.20
1.20
3.30
2.50
1.90
3.50
2.40
2.60
2.70
3.50
4.50
3.10
3.50
6.40
3.00
1.00
1.10
2.90
1.00
1.90
3.00
1.90
2.00
3.40
3.60
4.10
4.00
3.80
48.80
32.80
26.90
25.40
33.50
25.20
25.60
27.00
26.30
26.00
27.00
27.10
27.70
27.60
27.40
Northwest Europe
Mediterranean
vs Kebco cif Augusta
vs CPC Blend
US Gulf coast
vs WTI Houston
vs Mars
Singapore
vs Dubai
vs ESPO Blend
Margins calculated based on FCC unit yields
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