Oil Benchmarks Track Fuel Fortunes While Defying Supply Cuts - Bloomberg:
The diverging fortunes of fuel products derived from crude are influencing two oil benchmarks more than the state of supplies in the market.
U.S. sanctions on Venezuelan and Iranian oil as well as output cuts by the Saudi Arabia-led OPEC+ group are creating a shortage of heavy to medium “sour” crude that’s sulfurous and dense. Meanwhile, the American shale boom is generating ample shipments of cleaner and lighter “sweet” supply in the market.
So it stands to reason that prices of scarce sour crude -- reflected in the Dubai oil benchmark -- should gain versus the Brent marker, which represents sweet supplies. Yet the opposite is occurring. A gauge of strength between the two shows the Middle East oil is at its weakest level since December.
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