Brent spreads: room for more?

The constant deferrals of North Sea cargoes, together with the further delay in the return of Buzzard oilfield, have rekindled memories of last year's issues, skewing market positioning and supporting the Brent structure. While we retain our position that crude will remain well bid once the refineries return from maintenance, we are cognizant of the price moves in the Forties, Dated Brent and Brent structure in recent days. Should deferrals ease and more emerge on the rising supplies from FSU, Iraq and Saudi Arabia, then together with lower demand from China, the market risks being caught long. This makes us less favourable towards positioning for a runaway strength in Brent spreads in Q4 from current levels.​