Contango is back


Med Crude-Urals steady, swaps weaker on expected export jump

Reuters said:
Russia's Urals crude held steady on Thursday with paper swaps pointing to a market weakening in February when Russian oil exports are set to jump.
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There was no bids or offers for Urals in the Platts window on Thursday, traders said but swaps pointed to differentials falling, especially in the Baltic, where February prices were seen at around dated Brent minus $2.00-$2.15 -- some 50-75 cents weaker than current physical prices.
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Middle East Crude-Qatari oil slumps into wide discount

BusinessRecorder said:
Qatari grades slumped into wide discounts in the Middle East crude market on Thursday, with al-Shaheen sold at the lowest differentials in years amid ample supply and lower demand in Asia.
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BusinessRecorder said:
The supply pressure will build in the second quarter when Asia's crude demand falls as refineries shut for seasonal maintenance.
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BusinessRecorder said:
Adding to supply pressure, Iraq plans to boost monthly crude oil exports from its southern ports to a record high level in February, trade sources said.

The State Oil Marketing Organization (SOMO) has allocated 3.3 million barrels per day (bpd) of Basra crude to be shipped out in February, up from 2.7 million bpd in January, traders said, citing a preliminary loading programme.
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Commodities traders' costs soar with Swiss franc's leap

I am curious how this move in CHF will affect the physical volume of cargoes. My initial thought is that more expensive currency means fewer buyers in the market.

Today's curves:

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ogarbitrage said:
Singapore gasoline contango spread sinks to 6-year low, boosts storage incentive
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Asian oil market contango boosts demand for crude, gasoline storage

HellenicShippingNews said:
“We’ve got a few (gasoline) deals done for the short-term, 3-month period. The market is generally more upbeat,” said a Singapore-based commercial director with a terminal operator.

The contango between the first two contract months for gasoline has widened to about $1.20 cents a barrel, from around 5 cents since December, data from pricing agency Platts showed.
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HellenicShippingNews said:
Enquiries for gasoil storage have also picked up slightly as traders expect a flush of supply to widen its contango further, but deals have yet to materialize, industry sources said.

Landed storage for gasoil or middle distillates requires a contango of at least 80 cents a barrel to profit, but the price difference between the two near-month contracts is only about 10 cents a barrel.
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I think those rates are accurate. They have come off the highs this week, but still in the mid/high 70s/d for VLCCs and 50/d for Suez. Primorsk is due to slow in Feb on account of maintenance; large tonnage list in WAF put a ceiling on rates and less demand for WAF/West routes as the WTI/Brent spread widens.

Euronav and Tankships Int'l are setting up US-listed IPOs in coming weeks.

BP: Low Oil Prices Could Last 3 Years

Western Canadian output to grow in 2015, despite 33% cut in spending: CAPP

Kinder Morgan entering Bakken with $3 billion deal

Kinder Morgan buys Bakken assets from Hamm

After months of resilience, US cash crude market on the brink
 
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