The differential for CPC Blend fell to its lowest level in five weeks on May 22 as prompt June-loading cargoes that have missed their natural trading window struggle to find homes.

Platts, part of S&P Global Commodity Insights, assessed CPC Blend on a CIF Augusta basis at a $2.92/b discount to Dated Brent on May 22, 13 cents/b lower on the day to the lowest level since April 15.

TotalEnergies reoffered a 90,000 mt CPC Blend cargo, loading June 11-15, in the May 22 Platts Market on Close assessment process for Mediterranean crude. The cargo was initially offered at a $2.60/b discount to Dated Brent and was left outstanding at a $3.20/b discount at the 1630 London close.

The same cargo was previously left outstanding at a $2.95/b discount to Dated Brent in the May 21 Platts MOC.

Traders told Platts that the offered cargo was prompt and had missed its natural trading cycle, resulting in the steeper discount.

“In general, it seems the second-decade June has been cleared already (except the one in the window), so the pace is not so bad and natural date cargoes are steady,” one trader said.

June-loading Aframax cargoes trading in their natural cycle were heard around a $2.50/b discount to Dated Brent, while Suezmax cargoes were heard around a $2.70/b discount.

However, other market participants warned of a wider weakness across the CPC Blend on the back of a closed arbitrage to Asia and barrels becoming trapped in the Mediterranean.

“CPC is not in good shape,” one trader said. “The market is still slow. Arbitrage is closed to the Far East due to Dated structure, so everything has to be absorbed by Europe.”

The CPC Blend program has seen a significant boost in volume since March, underpinned by increased oil output at Kazakhstan’s Tengiz field, meaning sweet crude supply in the region has lengthened in recent months.
Source: Reuters