While the coronavirus situation in China seemed to have improved somewhat over the week ending May 13, projections of struggles for economic growth kept the possibility of weakening demand in some traders' minds.
After negotiations during the week ending May 6 arrived at a plan that would allow certain countries to continue importing Russian crude beyond the end of this year, EU members are expected to agree to the winding-down of Russian imports.
Saudi Arabia set the Official Selling Price (OSP) for its heavy grade for buyers in the Far East at a record high of $7.95/bbl above the Middle-Eastern benchmark for May (in data going back to 1970)—up from the $3.55/bbl premium that had been in place for April.
The sharpest month-on-month drop among the grades and blends covered in the charts below was seen for the coking margin on the Argus Sour Crude Index (ASCI) in the US Gulf Coast (USGC).
Prices were pressured early in the week ending April 29 by the ongoing coronavirus-related lockdown in Shanghai and the potential demand destruction associated with the personal movement restrictions.
Even though supply tightness got a lot of attention over the week ending April 22 due to the ongoing disruptions to Russian exports related to its attacks on Ukraine as well as new round of blockades that shut in capacity in Libya, demand concerns took the focus.
With many markets closed on April 15 for the Good Friday holiday, futures prices for crudes and petroleum products jumped over the short week ending April 14 due in part to projections of lower output from Russia amid widespread sentiment that buyers will seek alternative supplies even if not forced to do so by sanctions.
Futures closing prices for US benchmark NYMEX WTI jumped by 33.3% from the end of Dec. to the end of March, Middle Eastern benchmark DME Oman surged by 36.9%, and European benchmark ICE Brent skyrocketed by 38.7% over the three-month period.
Saudi Arabia set the Official Selling Price (OSP) for its heavy grade for buyers in the Far East at $3.55/bbl above the Middle-Eastern benchmark—up from the $1.40/bbl premium that had been in place for March—and then raised the differential further to an all-time high of $7.95/bbl for May (in data going back to 1970).
The sharpest month-on-month drop among the grades and blends covered in the charts below was seen for the coking margin on WTI in the Midcontinent.
