The North Sea crude trade is facing challenges as export volumes of BFOET crudes are down 10% year on year in July, totaling 588,000 b/d. Despite the Brent prompt premium holding steady at 20ยข per barrel, the dated Brent complex continues to struggle due to weak demand.
Traders are closely monitoring the market, hoping for signs of a turnaround, especially from Asia. The sluggishness in the North Sea crude trade, exacerbated by spring refinery turnarounds, has led to lower physical differentials and opened up various arbitrages to the east of Suez. However, Asia has yet to show significant interest in boosting demand.
The market is eagerly awaiting signals from Asia to kickstart a new buying cycle and indicate that the North Sea crude trade may have reached its bottom. The lack of buyers in the physical, dated Brent complex is a pressing issue that needs to be addressed for the market to stabilize and regain strength.
Despite the current challenges, traders remain optimistic about the potential for a rebound in the North Sea crude trade. With a careful eye on market dynamics and potential triggers for increased demand, the hope is that the market will soon see an upturn. Asia remains a key player in determining the future direction of the market, and its actions will be closely watched in the coming months.