The differential for CPC Blend has dropped to its lowest point in five weeks as of May 22, primarily due to difficulties in finding buyers for prompt June-loading cargoes that have missed their optimal trading window. According to Platts, part of S&P Global Commodity Insights, the CPC Blend was assessed at a $2.92 per barrel discount to Dated Brent on May 22, reflecting a 13 cents per barrel decline from the previous day and marking the lowest level since April 15. On this day, TotalEnergies reoffered a 90,000 metric ton CPC Blend cargo scheduled for loading between June 11 and 15 as part of the May 22 Platts Market on Close assessment for Mediterranean crude.
Initially, the cargo was offered at a $2.60 per barrel discount to Dated Brent, but it was still outstanding by the close at a $3.20 per barrel discount. This cargo had also been previously marked at a $2.95 per barrel discount in the May 21 Platts MOC. Traders indicated that the urgency of the offered cargo contributed to the larger discount, as it had missed its natural trading cycle.
One trader noted that demand for June-loads had already been satisfied, except for those currently in the market. He mentioned that while June-loading Aframax cargoes were trading at around a $2.50 per barrel discount, Suezmax cargoes were slightly higher at a $2.70 per barrel discount. However, concerns linger among other market participants regarding a broader weakness in the CPC Blend sector.
The limited arbitrage opportunities to Asia and an excess of barrels in the Mediterranean have left traders apprehensive. One trader commented on the challenging market conditions, stating that the closed arbitrage has constrained options for sellers. Despite these challenges, the CPC Blend program has seen a notable increase in volume since March, tied to heightened oil production at Kazakhstan’s Tengiz field, which has expanded the supply of sweet crude in the region.