Crude: Spot Premiums Disguise Weakness Versus Products

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Crude oil is not as tight as refined product supply, which results in a huge gap between the subdued value of crude oil and super expensive refined products. This historically skewed situation is made even more awkward as crude prices do see lofty premiums in the spot market, especially in Europe, where refiners gobble up as much spot as they can with margins at record highs. Meanwhile, trade flows continue to change in Europe with EU buyers self-sanctioning Russian crude that needs to sail all the way to Asia at steep discounts to compensate for the spot premiums in Europe. Outages in Libya and a threat of outages from Kazakhstan keep the short-haul crude market on edge.

Crude Oil, Oil Spot Markets, Oil Prices
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