- Signs of softness in the global oil market
- There were unsold Middle Eastern crude cargoes from a recent trading cycle that may be early signs of a global surplus (Bloomberg)
- The volume of unsold cargoes was between six and 12 million barrels, according to trader estimates
- Shipments are reportedly, typically discounted to move them as the monthly spot trading cycle ends
- These discounts often attract price-sensitive buyers in China and India who are typical purchasers
- However, traders have commented that there is no indication that these unsold cargoes have been snapped up, according to Bloomberg reporting
- Another sign of a possibly weakening crude market is the futures curve for Abu Dhabi’s flagship Murban crude
- Murban is in a bullish backwardation structure, but has weakened in recent sessions and price premiums for December-loading cargoes against Middle Eastern oil benchmarks also shrunk this week
- China’s oil stockpiling to slow (Rystad)
- Sanction concerns are expected to lower the rate at which the Chinese stockpile crude next year, according to Rystad Energy
- China’s stockpiling is expected to average 280 MBbl/d in 2026, compared to 600 MBbl/d over the first half of this year
- Rystad’s Lin Ye said Chinese refineries are expected to be “more careful with taking these barrels”
- Rystad’s view on Chinese oil purchases differs from Goldman Sachs who expect China to add 500 MBbl/d next year to storage
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