Kazakh CPC Blend crude falls to near 7-month low on extra supply, weak demand
London (Platts)--8Feb2013/829 am EST/1329 GMT
Kazakh CPC Blend crude differentials fell to near seven-month lows
Thursday on a combination of weak demand and additional supply, with
discounts to competing Mediterranean light sweet crudes at their deepest
since the middle of last year, according to trading sources.
Platts assessed CPC Blend CIF Augusta down 47 cents Thursday at Dated
Brent minus $0.92/barrel, the lowest since July 18.
During Platts' Market On Close assessment process, Trafigura sold to
Gunvor an 85,000 mt cargo, CIF basis Augusta, loading February 24-28, at
Dated Brent minus $0.90/barrel.
All Mediterranean light sweet crudes have been under pressure this year,
with differentials on grades such as Saharan following a markedly bearish
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But CPC's drop has been particularly sharp. Since reaching its 2012 high
of Dated Brent plus $1.45/b December 18, CPC Blend differentials have
steadily fallen, losing a cumulative $2.37/b.
"[CPC has fallen] quicker and deeper than expected," a market source
The recent drop stems in part from added supply in the form of three
injection cargoes -- two Aframax-sized and one Suezmax-sized -- into the
February program at a time when refinery demand for the grade is particularly
In addition, demand is currently "absolutely appalling," according to
another market source.
As such, CPC's discount to its naphtha-rich regional peer, Saharan
Blend, fell to its widest in nearly eight months.
Platts assessed CPC FOB at Dated Brent minus $1.86/b and Saharan FOB at
Dated Brent minus $0.06/b, resulting in the widest spread, $1.80/b, since
In addition, CPC fell to a discount to Libyan Es Sider of $1.77, the
most since July 9, and to Azeri Light of $3.98/b, the widest since July 18.
These spreads may be short-lived, however, as market sources said Friday
that they expect the other grades to follow CPC Blend.
"Saharan is not going to be far behind," a market source said. "If CPC
traded at minus $0.90, I don't know why anyone would trade for even flat for
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