On May 14th, the international crude oil market has recently exhibited a typical characteristic of internal divergence. On one hand, geopolitical conflicts have driven futures prices to fluctuate at high levels. On the other hand, the physical premiums for certain grades of crude have begun to decline significantly. This divergence between futures and physical markets reflects a split in market expectations regarding supply risks, intensifying structural market competition. A clear unilateral trend still requires more fundamental signals for confirmation.
Specifically, over the past few months, the physical premium for certain crude grades relative to the Brent benchmark had once reached over $30 per barrel. However, it has recently retreated rapidly to levels near parity or even a slight discount. This change reflects several core factors: first, some refineries have completed their emergency stockpiling, reducing their acceptance of high premiums; second, increased supply from alternative sources has alleviated dependence on Middle Eastern crude; third, the market's pricing of geopolitical risk premiums is beginning to rationalize, partially easing structural tightness.
Nevertheless, analysis institutions have recently warned that the decline in physical premiums does not necessarily mean structural risks have dissipated. Uncertainty remains regarding navigation through the Strait of Hormuz. Should new supply disruption events occur, physical market tightness could rapidly reemerge. Investors are advised to maintain balanced observation across both futures and physical markets, avoiding trading decisions based solely on one type of signal, and to preserve portfolio diversification.
From a trading perspective, the current state of the crude oil market imposes higher demands on both trend-following and arbitrage strategies. In the short term, the difficulty of betting on a unilateral direction has increased. Structured strategies such as calendar spreads and crack spreads may receive more attention. It is recommended that investors select appropriate instruments and products based on their own risk preferences, implement sound position control and capital management, and avoid being caught in a passive position amid sharp volatility.
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