Physical crude premiums that traded above $30 per barrel over the Oil – Brent Crude benchmark in early April have retreated to near flat or slight discounts in the May trading window, even as the Hormuz-related supply risk persists. The shift reflects refiners stepping away from paying close to $150 per barrel for spot cargoes, instead delaying purchases and betting on a conflict resolution that could normalize physical-market tightness rather than any immediate surge in non-Middle East supply.
Over the past month, Oil – US Crude has advanced about 11.1%, while Brent has gained roughly 14.3%, underscoring that futures benchmarks remain firm despite the collapse in physical premiums. Technically, both benchmarks currently register a short-term Buy signal and Buy signal, indicating bullish momentum even as end-users curb aggressive spot buying, a divergence investors may watch for signs of future convergence between paper and physical markets.
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