Crude Oil Price Movements
OPEC Monthly Oil Market Report – September 2017
The light sweet/medium sour crude spread
Global sweet/sour differentials were mixed in August when they widened further in Asia, while in Europe they
narrowed again on tighter sour supplies. In the USGC, the spread remained unchanged.
, Tapis premium over Dubai increased for the third month in a row, despite ongoing lower sour crude
supplies. The spread grew as the Brent/Dubai spread widened further to around $1.35/b, which further
slowed west-east arbitrage movement for Atlantic Basin crudes. Lower supplies of Vietnamese sweet crudes
amid the start-up of a new refinery there also supported the Asia Pacific light sweet oil market. Moreover,
continuing healthy demand for Asia Pacific light sweet crudes amid firm refining margins in Asia and new
requirements for refined products for export to the US in the aftermath of Harvey, supported the trend. The
Tapis/Dubai spread widened by 45¢ to $3.37/b in August. The Dated Brent/Dubai spread widened, improving
by 42¢ to the advantage of Brent, a $1.34/b premium compared with the previous month’s 92¢/b premium.
, light sweet North Sea Brent premium to Urals medium sour crude decreased again by 36¢ to
33¢, a fresh two-year high on firm demand for sour crudes. Urals price differentials to Dated Brent
strengthened in the Mediterranean amid strong margins, limited supply and a steady flow of Baltic barrels to
Asia, which offset an outage at Shell's Pernis refinery. Meanwhile, late in the month Urals crude differentials
to Dated Brent in Northwest Europe weakened for an eighth consecutive session. The grade has been under
pressure after a loading plan for Baltic ports and Novorossiysk showed ample supplies amid a heavy
domestic refinery maintenance season, limited buying interest and weaker refinery margins.
Graph 1 - 5: Brent Dated vs. Sour grades (Urals and Dubai) spread
, the Light Louisiana Sweet (LLS) premium over medium sour Mars remained at $3.17/b. The
USGC grades rallied to their strongest levels in nearly two years after Brent's premium over US crude
widened, helping to increase the amount of crude exports overseas to Asia. Meanwhile, differentials on the
USGC were mixed in volatile trade with low liquidity, as tropical depression Harvey caused destruction
throughout the USGC energy industry. Trading was fairly thin, with many Houston traders out of their offices
because of flooding. About 4.4 mb of US refining capacity has been shut down by the height of the storm,
representing nearly a quarter of US refining production.
Sources: Argus Media, OPEC Secretariat and Platts.