Facing record oversupply, U.S. oil looks for home in Europe

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Baku, March 5 AZERTAC

As U.S. oil inventories reach all-time highs, cargoes of crude are increasingly flowing towards Europe, where higher prices and lower shipping costs have made the region an attractive hunting ground for those selling light sweet oil.

According to Reuters, at least three cargoes of U.S. crude that are likely to cross the Atlantic from the U.S. Gulf Coast in the coming few weeks.

Others said offers of a variety of grades, particularly WTI, are coming for April and May arrival for buyers who want them.

Since the U.S. Congress late last year abolished the more than 40-year-old restriction on U.S. crude exports,

The more favorable price spread is driven in part by supply disruptions in Europe, including a force majeure on Nigeria's Forcados, a European refinery staple, that sources said could last until March as well as disruptions to Kurdish oil supplies.

In northwest Europe, differentials for physical barrels of oil have risen to around their highest since the start of the year.

Most of the most recent round of offers for U.S. deliveries right now are for April or May arrival.

"More and more assays are coming into our in-boxes," another refiner said, adding they had a choice of grades.

Many European refiners face the problem of not having run a U.S. crude through their systems in living memory and, as such, are wary of doing so, even though on paper, the numbers might make economic sense.

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