Crude Oil Price Movements
OPEC Monthly Oil Market Report – November 2017
Asia is set to ramp up crude oil imports from the US in late 2017 and early next year. As many as 11 tankers,
partly or fully laden with US crude, are due to arrive in Asia in November, with another 12 to load oil in the
US later in October and November before sailing for Asia. Between November and January, very large
volumes of US crude are reported to be heading to Asia. This increasing arrival of arbitrage crude is putting
significant pressure on West African and other Brent-related sweet grades.
The first-month ICE Brent/NYMEX WTI spread widened to $6.05/b, a 42¢, or 7.4%, expansion.
Table 1 - 3: NYMEX WTI and ICE Brent forward curves, US$/b
The light sweet/medium sour crude spread
The sweet/sour differentials in Europe and Asia narrowed on all fronts, amid tighter supplies and healthy
demand for sour grades, while lighter grades came under pressure from arbitrage flows from the US. In the
USGC, the spread widened, despite lower sour crude imports from OPEC countries.
, the light sweet North Sea Brent
premium to Urals medium sour crude decreased
sharply by 71¢ to 47¢/b, bouncing back to a two-
year low premium. Urals differentials to Dated Brent
were higher on limited supply of the grade ex-
Novorossiysk in November and lower shipments of
crude from the Kurdistan region to the port of
Ceyhan. Urals differentials continued to improve
against Dated Brent due to a sharp fall in
November loadings from Russia's Baltic ports and
healthy demand from European refiners.
, the Tapis premium over Dubai decreased
for the first time in four months amid ongoing lower
sour crudes supplies. The Brent/Dubai spread also
narrowed, theoretically encouraging the flow of
west-east arbitrage for Atlantic-Basin crudes.
Graph 1 - 6: Brent Dated vs. sour grades
(Urals and Dubai) spread
Spot trading of December-loading cargoes started off on a strong note in the Middle East crude market with
several grades sold at premiums against their OSPs. The Dubai Market was supported by the Saudi supply
adjustment to some buyers in Japan and China in December. Peak seasonal winter demand in the Northern
Hemisphere will lift demand for distillate-rich grades out of the Middle East.
On the other hand, light sweet Tapis was under pressure from increasing US exports to Asia. Demand from
the key buyer China for spot crudes in Asia Pacific slowed, as independent refiners in China have used up
2017 crude import quotas and are waiting for Beijing to issue next year's quotas.
The Tapis/Dubai spread narrowed by 59¢ to $4.17/b. The Dated Brent/Dubai spread narrowed by 91¢ to
$1.65/b from $2.56/b in the previous month.
6FM 12FM 12FM-1FM
25 Sep 17
25 Oct 17
25 Sep 17
25 Oct 17
Note: FM= future month.
Sources: CME Group and Intercontinental Exchange.
Sources: Argus Media, OPEC Secretariat and Platts.