Urals Blend Arbitrage Continues From Novorossiysk

The Urals arbitrage looks to be strengthening relative to the REBCO curve on Thursday.  Urals is a blend of light and heavy crude oils from West Siberia, the Ural Mountains in Russia, and flow from fields in the Caspian, an area rich in oil history.

Following an export suspension after a flood last week, Novorossiysk  is once again busy, adding 2 tankers between yesterday and today. 

Green icons are bulk traffic: wheat, coal, iron ore.  Red icons are chemical, crude, and gas tankers.  Live marine traffic data available here.

Several were stuck in rotation waiting for space through the passage at Istanbul, one of several major choke-points along the way.  Below is a picture of the congestion at 10:00pm Istanbul time.

And a closer look at the actual channel:

via Reuters,

Urals differentials in the south were still said to be strong on the back of tight supplies. The July programme is largely sold out with only part cargoes left.

    "It's all sold out. It's part cargoes changing hands at ridiculously high levels," said one trader.
    One Italian refiner has started taking Urals cargoes from North West Europe to the Mediterranean in a rare arbitrage movement, taking advantage of the north/south price gap, a trader said.

Immediate tanker (red icon) traffic at Primorsk, the main export terminal for Urals in the Baltic, remains surprisingly dry.

WTI Forward Curve: Where Abundant Supply Meets Geopolitical Uncertainty

Several of the spreads on the front of the curve are nearing very compelling levels.  And if you're interested in a longer term play on WTI, consider the sloping severity of the back of the curve. 

via 4 Apr Reuters,

Traders said between 20-30 cargoes of Nigerian crude oil were still unsold from the April-May programmes.

"Flow to the States is minimal. Light, sweet is plentiful in the U.S. so there is limited W. African demand," said a West African crude oil trader.

via 4 Apr Reuters,

"There is certainly a discrepancy between futures and cash crude markets," said Olivier Jakob from Petromatrix consultancy. "There is no shortage in the physical market, but there is a lot of uncertainty regarding Iran. If you want to hedge Iranian risk, you do it on the futures market."

"The reality today is that the market is well oversupplied. OPEC production has been rising consistently since September and will probably continue rising further," said Colin Smith, energy strategist at VTB Capital.

"At some point - as happened in 2008 - the markets will take note, perhaps before it shows up in the inventories but certainly as and when it does show up in the inventories," said Smith, whose bank is a top lender to the Russian oil industry.

via 3 Apr Reuters,

Novorossiisk Port

Delays at Russia's main Black Sea port of Novorossiisk due to bad weather continued to crimp supplies in the Mediterranean in contrast with well supplied markets in the Baltic, where Russia opened a new export outlet of Ust-Luga last month.

"The arb between the Baltic and the Med is well open now... Some 300,000 tonnes might have already sailed," a trader with a major said, referring to arbitrage shipments from northern Europe to the Mediterranean where prices are around $1 per barrel higher.

"Everybody is waiting to see if the U.S. and EU will release strategic stocks," said a trader. "Nobody is buying."

via 3 Apr Reuters,

Nabiullina said that Urals blend URL-E crude price forecasts for the following two years have been left unchanged at $97 and $101 respectively, adding that the ministry expects oil prices to decline from current levels.

via 2 Apr Reuters,

"Supply is really ample here. You can see any kind of crude oil you can think of. West African, Caribbean, North Sea and so on," a trader with an oil refiner said.

via 30 Mar Reuters,

"Urals is typically depressed around April-May due to the spring maintenance season. This year you also have extra volumes from Ust-Luga," he added referring to a new Russian Baltic Sea port, which was launched earlier this month.

In the Platts window, Litasco offered a rare 60,000-tonne Siberian Light cargo at dated Brent minus 25 cents loading from port of Tuapse in mid-April, more than $1 per barrel weaker than previous price indications, but could find no buyers.  "A couple of other cargoes are still available and are being offered," one trader said.  Socar offered Azeri Light a dated Brent plus $3.50, slightly weaker than previous price estimates, but found no buyers, traders said.      

via 29 Apr Reuters,

Traders estimated that Glencore, the world's largest publicly listed trader, was set to market up to 10 Urals cargoes in the Baltic in April, a number not seen for many years while the market for Russian crude was dominated by other players. "Glencore is definitely coming back big," one trader with a major oil company said. "I would say they are now sharing leading positions with Shell and Statoil."               

WTI Forward Curve: Contango in the front, backwardation beyond December 2012

For anyone curious how to trade the coming whiplash in the curve, see Downey's Oil 101. 

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Friday Forward Curves: Gold, Silver, Copper, WTI & Brent

Some big moves today.

Nymex Gold

Nymex Silver

Nymex Copper

Nymex WTI

ICE Brent

NYMEX WTI Crude Update

I am by no means a technician or a fibonist.  Draw enough lines on a chart and you can create a reason for a price to go anywhere. Take these with a grain of salt.

NYMEX October, 2011 WTI

NYMEX WTI Weekly Continuation

Today's forward curve (at the moment).

I have previously touched on crude's outright price and more than likely will do so again.  As for predictions, prices will go up and then they will go down (repeat).

Weekly WTI Crude Continuation

Crude Finally hits $100/bbl

For one lot. I bet there's a trader somewhere ordering a frame for that ticket.