Oil set for sweet-sour rebalancing

摘要

An imbalance in sweet-sour crude supply has been a key feature of the oil market since 2017. But fundamentals and price spreads suggest the historically elevated value sour grades have held relative to sweet may finally get eroded. The altered sweet-sour dynamic over the last three years or more has been driven not only by Opec+ cuts and US sanctions on Iran and Venezuela, reducing the availability of sour grades, but also the growth of US shale, boosting supply of sweeter barrels—and transforming the quality of the marginal barrel enter- ing the market.