05 February 2025: 16:30 GMT
We made the call! Saudi OSPs are pretty mega! But they’ve been kinder than mechanics alone would imply – aggressive backwardation in Dubai structure throughout calendar January suggested a hike of around $2.50 for Arab Light to Asia but as we expected (and previously discussed), the Saudis took the edge off and bumped it up by only $2.40 to Oman/Dubai plus $3.90/Bbl. Arab Heavy is up $2.60/Bbl. Last time the Arab Light OSP to Asia was this high was December 2023! OSPs to Europe across grades are up $3.20! But on flat price, down we go! The morning saw Brent flat price deflate after the Trump panic of yesterday afternoon. Before 13:00 GMT, it was approaching $75 again and had dropped a buck from its high yesterday. The EIA stats provided the little push flat price needed to edge below $75 – just. A few cents drop for a build of over 8.6 mil bbl to inventories… It’s as if the market is coming to almost completely disregard the weekly data. Once upon a time, such an extreme build would have sent the market into a frenzy, dropping through a trapdoor. But now, it’s just another regular occurrence.
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