OREANDA-NEWS. January 22, 2016. Welcome to the first version of The Oil Big Five for 2016, when we round up some of the biggest news and trends from the global oil industry and think to ourselves: Wow, things sure have changed since our first post.

But then, that’s oil for you: Things are always changing, and yet some things remain the same. We asked our oil editors and analysts around the world for what they think are outstandingly important drivers in the markets, and these are items they chose, in no particular order.

This is also your chance to weigh in. Tell us in the comments whether any of these topics ring especially true to you, or whether we’ve neglected some other topic that you think is really interesting or has the potential to shake markets. You can also find us on Twitter @PlattsOil and can share your thoughts on this post with the hashtag #oilbig5.

1. US crude exports — to Europe

Last month, the newly unfettered access of US crude oil to global markets made our list, but that’s not the end of the story. One senior editorial leader here said, “The Big Five should really become the Big One this month, all about US crude exports.” While many wondered whether somewhat dubious economics would hobble exports, it turns out that the WTI/Brent spread doesn’t solely determine whether shipments will hit the open seas, and the first cargo of US crude set sail before 2015 closed. Furthermore, European refiners, which have been on a bit of a tear this year with crack spreads, are now eyeing attractive gasoline and naphtha cracks that could help drive up demand for US light sweet crude and condensate. On the other hand, European refiners have been spoilt for choice recently. So can European demand for US crude last?

2. Western Canadian crude prices and production

While the light sweet crude of the US shale plays gets a lot of attention, heavy Canadian crudes rule much of North America and are dealing with some significant pressures. The US dollar price of Canadian heavy has dipped below \\$20/b for several grades so far in January. Canadian heavy benchmark Western Canadian Select, an unconventional heavy sour, hit \\$19.82/b January 8, the lowest outright price since Platts started assessing it in April 2006. (The WCS price was alarming the market back in August at \\$27.47/b, too.) As a result of the price pressure, some companies are pushing up maintenance, and there’s been talk that production could be shut in. Winter is traditionally a period of peak activity in Western Canada, with an average of 530 rigs in operation during a “good” winter drilling season in Alberta, Saskatchewan, Manitoba and British Columbia. But for the week ended December 18, that figure was 158, according to data from the Canadian Association of Oilwell Drilling Contractors. Will prices stifle production this winter, and if so, who could feel the impact most keenly — conventional and heavy producers, or oil sands players?

3. North Sea spot market backwardation

Despite generally weak crude values, physical differentials in benchmark North Sea crude oil grades saw big swings in January, with bids and offers for neighboring cargoes showing a wide divergence in values; a dual market seems to be emerging in the region. January loading cargoes were bid at a significant premium to February loading cargoes of the same grade, meaning there’s backwardation in the spot North Sea market while the rest of the physical and financial crude complex is trading in contango. What gives? PetroIneos, a joint venture between Ineos and PetroChina, became the largest bidder for North Sea crude in the Platts Market on Close Assessment process and bidding for January-loading cargoes 34 times as of January 7, compared with seven bids for December-loading cargoes and no bids for November-loading cargoes. Traders told Platts that PetroIneos’ buying interest appears focused on specific dates, different crude grades than usual for the company, as well as on January-loading cargoes held by Shell. One of our crude managing editors put it into perspective, saying, “This looks at a huge trend in crude buying in the North Sea which was quite controversial, and which demonstrated a very different structure for the January Brent market than that seen for other months.” Is this something that will continue through the rest of January and the winter? Will PetroIneos continue its bidding, or will it back off? And what could prompt the North Sea market to fall back in line with the larger crude complex?

4. US Gulf Coast vacuum gasoil

Refined oil products along the US Gulf Coast are at multiyear lows — as are products around much of the world — and it’s a good time to remember that crude isn’t the only input to start the refinery process, one managing editor said. VGO producers in various parts of Europe and Russia are traditionally long in the product, and market sources in the US are reporting cargoes of feedstock are coming to US shores regardless of whether there’s demand or open arbitrage opportunities. VGO is used to make gasoline, among other things, but while gasoline demand is strong, outright prices are also dipping under \\$1/gal. On January 15, VGO barges at Houston fell on news that there will be a US-bound cargo coming from Colombia, and high-sulfur VGO has held value or fallen 25 of the last 26 trading days. Looking later in the year, a new Russian refinery is expected to add to the Transatlantic flow of VGO. “I guess people are getting a real shock with ships entering Gulf Coast waters unsold,” a European feedstocks trader said to Platts. “I think now there is a sudden realization that this market is not in good shape.” Will VGO values continue to fall as potentially more cargoes stack up in the Gulf of Mexico, and what sort of ripple effects could this have on downstream gasoline or diesel?

5. The Saudi-Iran conflict’s impact on oil prices

The worldwide glut of crude oil means that the way markets respond to news is much different than in the past, as we noted on The Oil Big Five in February 2015, when Saudi Arabia’s King Abdullah died. We got a reminder with the new year, when a conflict between Saudi Arabia and Iran didn’t send prices soaring as it may have in years gone by. International oil prices were momentarily lifted, but analysts don’t view the escalated tensions between the two countries as threatening to the global oil supply anytime soon. Together the countries account for 13 million b/d of global oil output, but as we’ve noted before, OPEC members are battling for market share both among themselves as well as within a larger world of well-supplied producers. So what would it take for global oil prices to lift significantly? What sort of news could bump up prices and, more impressively, keep them up?