Crude: Ample Supply Makes Europe Too Sweet, Asia Too Sour

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The crude market is saturated and undergoing a double dislocation. Too much light, sweet crude is processed in Europe where even at 95% utilization, refiners fail to produce enough diesel. The region needs more sour to “heavy up” its refining slate and achieve the right mix of products. East of Suez, too much heavier, sour crude is flooding Asia because of the huge discounts offered on Russian oil, enticing even the less willing refiners like Chinese “teapots” to run more when actual demand is not there yet.

Crude Oil, Oil Spot Markets, Oil Trade, Oil Supply
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