Flattening futures curves set to lead to OSP cuts in the months ahead

Atlantic Basin:

• US waterborne crude imports are gradually rising for a fourth consecutive year as refinery runs climb higher
• Colombian and Venezuelan imports are stepping up to fill the gap left by Mexico on the US Gulf Coast
• The first cargo of Ecuadorian crude has discharged on the US Gulf Coast in three years as ramifications of TMX cause a ripple effect

Europe and FSU:

• Higher gasoline production from Nigeria pressures buying of European barrels significantly
• Return of Libyan crude production to full volumes in November should drive exports 20% higher m/m
• Higher light sweet crude availability in the Med pressures CPC Blend and Azeri BTC differentials over October

Middle East and Asia:

• Improving product cracks in Asia have limited the downside for Middle Eastern OSP changes into December, with Saudi Aramco cutting formula prices by $0.40-0.50/bbl compared to November
• Flattening futures curves and the prospect of post-maintenance refinery supply recovery are set to bring about another OSP cut next month, with formula prices set to dip in January 2025, too
• California's downstream woes are limiting the future prospect pool of TMX buyers, making Canada's dependence on Chinese refiners even more palpable next year