WTI Midland Crude Differentials Ease as Total Buys Cargoes from Shell, Equinor

Total purchased two cargoes of WTI Midland crude from Shell and Equinor in the Platts window on Tuesday, with the deals reflecting a decline in the premium for U.S. crude delivered to Europe compared to recent transactions.

Trade Details

The transactions, which set the physical market benchmark, saw differentials for the U.S. grade weaken. According to market participants, the details of the sales were as follows:

• Shell sold a cargo to Total for August 30-September 3 delivery at dated Brent plus $4.95 per barrel on a cost, insurance, and freight (CIF) Rotterdam basis.
• Equinor sold a second cargo to Total for August 24-28 delivery at dated Brent plus $5.00 per barrel CIF Rotterdam.

Based on calculations, these trades equated to premiums of approximately $3.26 and $3.31 per barrel, respectively, on a free on board (FOB) basis.

Market Context

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The prices represent a notable decrease from the last WTI Midland trade in the window. On August 4, Glencore sold a cargo for a similar delivery window to Equinor at dated Brent plus $5.50 CIF Rotterdam, indicating a softening of at least 50 cents per barrel.

Further market activity on Tuesday included an additional bid from Total for a September 1-5 cargo at dated Brent plus $5.00 CIF Rotterdam. Meanwhile, Equinor withdrew two offers for WTI Midland cargoes that were priced higher at plus $5.05 and plus $5.75 CIF Rotterdam.

Other Grades Offered

In the same trading window, other North Sea grades were also being offered. BP offered a cargo of Johan Sverdrup crude for August 25-29 delivery at dated Brent plus $1.30. The company also offered a cargo of benchmark Brent crude for September 10-12 delivery at dated Brent plus $3.15.