(Bloomberg) -- A sudden and surprising upturn in the world’s most important oil price may be set to ease off thanks to an influx of supply from the US.

Over the past eight trading sessions, Trafigura Group and Gunvor Group have been bidding heavily for grades of crude oil that define Dated Brent during a pricing window organized by S&P Global Commodity Insights, better known by oil traders as Platts. Their actions drove up the premiums that those crude fetch, a sign of bullishness. Prior to that, the market had been dominated by sellers and appeared weak.

However, the higher prices had created a greater incentive to deliver cargoes from the US, where the market is not so strong, and the incoming supply is alleviating the upward pressure on prices. On Wednesday, for the first time in two weeks, Trafigura bought a WTI Midland cargo at a lower premium than the previous day. 

Dated Brent is pivotal to physical global oil prices and a web of associated derivatives. The benchmark is determined by bidding and offering for six key grades: five from the North Sea and one from the US. 

Trafigura stepped up its bidding during the Platts window on June 17 and was joined a day later by Gunvor. On June 25, one of the six benchmark grades — Forties — was bid at about $1.60 a barrel above Dated Brent, having been 70 or 80 cents below it before the two firms increased their activity.

The Dated Brent market is dominated by a relatively small group of large trading houses, and it’s not uncommon to see one or two of them make a bold move each month. 

Other traders said the underlying supply-demand picture appeared to pick up somewhat, but that they were surprised by the scale of turnaround caused by Trafigura and Gunvor’s bids. Trafigura and Gunvor declined to comment.

Traders said the flow US barrels may temper the rally. 

On June 21, the four cargoes that Trafigura bought were WTI Midland. Three more were purchased in the three following sessions. Aramco Trading, a unit of the world’s biggest producer Saudi Aramco, also offered one. WTI Midland has become the cheapest of the six benchmark grades, replacing Forties. That means it sets the benchmark. 

Until 2023, Dated Brent relied only on buying and selling of North Sea grades, production of which was in steady decline. Then, in May last year, Platts added WTI Midland to the benchmark to boost liquidity.

It remains to be seen whether Trafigura and Gunvor will continue their  bidding. In the past, decisive trading activity has tended to stop after the front-month Brent contract expires. That expiry happen on Friday. 

Gunvor, for example, was a key buyer in April, and then a seller in May. 

Gunvor Snaps Up Benchmark Crude Oil That Others Are Offloading

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--With assistance from Jack Wittels and Archie Hunter.

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