Mediterranean troubles

Crude prices steadied above 81 $/b for the March ICE Brent contract and front-month backwardation remained strong, above 60 cents, as Libyan output was expected to ramp up quickly to 900 kb/d instead of 750 kb/d, following maintenance work on a pipeline delivering crude to El Sider. In Kazakhstan, the situation was still unclear, with the intervention of Russian troops likely to have calmed the revolt. Still, few details emerged on the Kazakh crude production. Chevron disclosed that the Tenzig field’s output was gradually ramped up yesterday. Finally, the Mediterranean supply continued to be under stress, with the Azeri BTC crude exports 6% lower in February (-4 mb) compared to January, which will continue to boost short-haul European crudes such as the North Sea crude for Med refiners.