OREANDA-NEWS. May 14, 2015. This month’s version of The Oil Big Five marks its first anniversary and we’re pleased to still be serving up a monthly dose of topics to keep an eye on in the global oil industry.

You can read past entries in this series here if you’re curious about what sort of issues our Platts editors and analysts have highlighted throughout the past year. And remember, these topics are ideally just conversation starters. Tell us what you think of the items, and tell us which issues or items are most important to you. While we solicit ideas presented here from those in our offices around the world, we want our views to be informed by those in the industry.

1. Gasoline along the US Gulf Coast

In the US, the summer driving season typically picks up shortly after Memorial Day, when children finish school and families pack up for a road trip in search of relaxation or adventure. Along the US Gulf Coast, refineries are producing gasoline at healthy levels, cashing in on cracking margins, but the question is whether exports to Latin America will ramp up as domestic demand increases.

Mexico, for example, imported a record amount of refined products from the US in January and was sourcing higher-than-expected volumes along the Gulf Coast toward the end of April. Three major reasons have been pegged for Mexico’s uptick in imports: dwindling crude production from Pemex; tax structures that make imports more profitable to the Mexican government; and Mexican refineries taking a hit from Pemex spending cuts.

In the US, some have also said the increased exports are diverting barrels that would otherwise end up on Colonial Pipeline, and one source said refiners won’t mind flooding the area with product as long as crack margins hold. Will exports continue apace, or will domestic demand keep the barrels in US cars?

2. Chinaoil breaks record for Dubai volumes

Chinaoil launched into another buying spree this spring, buying a record number of cargoes during the Dubai Market on Close assessment process: 55 June-loading cargoes of 500,000 barrels each, the highest number of cargoes ever reported in a single month for any Platts MOC assessment process. (The previous record for the Dubai MOC was 49 cargoes, set in October, also by Chinaoil.)

It’s thought that China is well-positioned to store crude and benefit from relatively cheap spot cargoes with a contango structure. First-month Dubai crude prices have been at a discount to third-month Dubai prices since late October, Platts data shows, and it’s the most sustained contango since November 2009-November 2010.

Record refining margins have encouraged crude oil purchases in Asia recently, but margins fell steeply in April. What will margins look like in May and into the summer, and will Chinaoil’s buying continue setting a strong pace?

3. EMEA’s sweet crude supplies

In March, we talked about the growing overhang of unsold Nigerian crude, “but since then the malaise has spread,” as one editor told us. Mediterranean sweet grades – even stalwarts like Azeri Light – have seen prices fall dramatically due to the overwhelming supplies.

The creeping overhang has spread geographically. In the North Sea, sweet Norwegian crude grade Oseberg traded May 1 at Dated Brent plus 10 cents/b, its lowest differential since August. Ekofisk, another sweet Norwegian grade, fell April 22 to Dated Brent plus 30 cents/b, its lowest in eight months, before recovering slightly. European refinery maintenance has reduced demand for North Sea grades, and turnarounds will last through at least part of May.

And back in Nigeria, some 10 million Nigerian barrels went unsold between end-April and end-May, said one trader, including grades like Bonga, Bonny Light, Brass, Okono and Qua Iboe. (A recent election is also compounding issues there.) Refineries should be returning from maintenance in May and June in Europe—will an uptick in demand be enough to make a significant drawdown of supplies?

4. Disconnect between crude futures and physical market

Futures markets rallied in April, with prompt Brent and WTI futures rising 17% and nearly 19%, respectively. But have there been any real improvements to fundamentals? Global demand is increasing, yes, but supply is still outpacing demand.

Cargo differentials are often used as a sign of strength or weakness of the physical spot market, and they slumped to their lowest in months in April. Even as the prompt North Sea market weakened in April, though, the Brent futures structure was recovering. And on the other side of the Atlantic, US Energy Information Administration data has shown consistent crude stock builds for the past 16 weeks, but futures markets seem more attuned to the deceleration of US crude production growth.

It will be interesting to see what happens to the markets in May and June. Will futures markets continue ticking upward, and will supply continue to outstrip demand? Or will the markets move more in line with each other?

5. Russia’s relationship with China

In a very full-circle sort of move, an editor suggested we take a look at Russian sanctions this month, which is something we did one year ago when we debuted this feature. It’s well-known now that Russia and China have boosted cooperation since the Ukrainian crisis and resulting Western sanctions, and Putin said last year’s Russian crude supplies to China grew 40% year on year to 28.5 million mt (572,300 b/d).

Putin has also said he would welcome more Chinese cooperation offshore Russia, and Rosneft and CNPC have already agreed a framework agreement on CNPC taking a 10% stake in Rosneft subsidiary Vankorneft, which is developing the biggest East Siberian greenfield project.

But a lot has changed since that agreement: crude prices have plummeted, and uncertainty over economics may have contributed to the lack of progress on the deal. Looking forward — perhaps to the next year of The Oil Big Five — how will the Russian/Chinese relationship change, and will sanctions be shifted at all?