Trump's Blow to Iranian Oil Sparks Curious Price Divergence
Apart from the sanctions, worries over available spare capacity and a surge in profits from producing gasoline and gasoil compared with heavier residual fuels has lifted sentiment for light-sweet oil, which is typically easier to process and turn into lucrative products such as diesel.
“Profits from producing distillates versus fuel oil in Asia have surged, supporting light-sweet Brent crude while weighing on the heavier grades such as Dubai,” said Den Syahril, a Singapore-based senior analyst at industry consultant FGE. “With crude markets as finely balanced as they are now, traders taking large positions in the oil-futures market can cause a pronounced impact and cause wild swings in benchmarks such as Brent.”
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