Prices for Russian export oil Urals fell below the cost of the North Sea benchmark Brent. S&P Global Platts reported this.
At the same time, in June, the Urals premium to Brent broke a 20-year record. The spot price for Russian oil in Northwest Europe (CIF Rotterdam) last week ranged from $ 41.75 to $ 43.26 per barrel. At the same time, the discount to Brent ranged from $ 0.05 to $ 0.15 per barrel.
While Urals maintains premium to the North Sea standard in the Mediterranean region (CIF Augusta), note in S&P Global Platts. The spot price for Russian raw materials in this region of Europe last week ranged from $ 42.2 to $ 43.8 per barrel. And the positive spread to Brent reached $ 0.45-0.55 per barrel.
Why Urals has become more expensive than Brent
Market conditions have changed in recent weeks. European refineries are increasingly focusing on cheaper oil from the North Sea region. In addition, the plan for oil shipments from the Russian ports of Primorsk, Ust-Luga and Novorossiysk in August will amount to 4.7 million tons.
This is 1.38 million tons higher than in July amid easing restrictions in OPEC +, explains the managing editor on the oil market S&P Global Platts Ian Stevenson. Recall that Urals began to trade more expensive than Brent in June, when crude exports fell sharply due to restrictions under the OPEC + agreement.
Russia under this deal from May to late July cut oil production by 2.5 million barrels per day – up to 8.5 million barrels. In June, the premium to the North Sea standard reached $ 2.45 per barrel. However, by the end of July, the feverish demand for Russian crude had weakened slightly.
Given the limited supply of medium-heavy oil in Northwest Europe, the Russian grade has been valued higher than the North Sea dated since April 24th. The rise in the price of Urals is due to two factors “, – explained in the agency Argus.
” This is a reduced supply of raw materials within the framework of the OPEC + agreement and a high yield of diesel fuel. The demand for this fuel remained relatively stable compared to the interest in other petroleum products under the restrictions due to COVID-19, “- noted in Argus.
Against this background, on June 29-30, the Russian benchmark premium to Brent reached a record 2.45 dollar per barrel. This made Russian oil less attractive, and the process was reversed. “In the conditions of weak interest in Urals, the parties of this grade fell in price,” the agency reported.
“The premium for Urals to Brent on July 15-16 was $ 0.3 per barrel. This could restore demand for this raw material, including from the side of processors in the Baltic region, ”writes Argus. According to him, in general, in the first half of July, the premium averaged $ 1.25 per barrel. : ///
Record Why the Urals brand again became cheaper than the Brent brand first appeared TEKNOBLOG .
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