Oil News: Crude Oil Outlook Sours as Physical Discounts Spread Globally
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Key Points:
- Physical crude discounts spread from the Gulf to Europe, signaling a global supply surplus for oil markets.
- Crude oil futures erased the entire war premium as Hormuz reopened and Iran exports prepared to resume.
- Traders remain in sell-the-rally mode as rising supply and weaker demand pressure the crude oil outlook.
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The war premium that took months to build came off in a single session. Tankers started clearing the Strait of Hormuz, physical crude flipped to discounts from the Gulf to the North Sea, and Iran’s barrels are already loaded and cleared to sell under the 60-day waiver. The shorts who had been waiting for this trade got their confirmation Wednesday. The longs who stayed in the fear trade got run over by supply that was already sitting on the water.