Note down According to export statistics, dealers, and experts, Guyanese flows are pushing pricing for the Norwegian grade to a 14-month low, further pressuring Johan Sverdrup crude in Europe at a time when refinery maintenance is already lowering demand.
An analytics outfit called Kpler said that the amount of Guyanese oil loaded onto ships destined for Europe reached a record high of 432,000 barrels per day (bpd). The new Payara Gold stream has helped the South American country’s crude exports; it is extremely similar to Sverdrup in grade, so it can be a good substitute when price differentials encourage European refiners to make the long-haul transatlantic journey.
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“Inflows from Guyana are weighing on Sverdrup,” as stated by Platts, the price reporting organization S&P Global Commodity Insights. Sverdrup is being pushed lower by a decline in overall crude demand in Europe due to springtime refinery maintenance, according to two traders. The situation is exacerbated by the fact that sales of the grade to its traditional demand outlet in Asia are being hindered by ongoing shipping problems in the Red Sea, which is causing local supplies to surge.
“It’s a combination of refinery maintenance in Europe, also the high cost of shipping it to the east, meaning it has to discount locally,” Telling Reuters, a trader requested anonymity. With a date of delivery in late March at Brent minus $2.30 delivered to Rotterdam in the Platts window on Tuesday, Equinor, a Norwegian firm that manages the Sverdrup field, sold a cargo of the grade to Shell. This was more than $5 below where the business was selling the grade near the end of January.
“Prices in the market are a function of the supply and demand situation,” Reuters was informed by Magnus Frantzen Eidsvold, an Equinor press spokesperson. According to insiders, pressure is increasing as a result of the Norwegian grade’s increased shipments in March and April. “Sverdrup is a massive program and for that to clear there has to be decent demand,” stated an additional trading source. However, Katona of Kpler cautioned that the present smaller differentials may soon lead to a resurgence in demand. “Sverdrup differentials will most definitely strengthen once the March program is all sold and the market realizes what an incredible bargain it is.”
