Posted on 03/17/2015 6:43:39 PM PDT by thackney
Record-high crude-oil supplies in the U.S. pushed the benchmark U.S. crude-oil contract, known as West Texas Intermediate, to fresh six-year lows Monday.
But Brent crude, the global benchmark, is still about $7 a barrel above its own recent lows.
Much of the world’s excess oil has ended up in the U.S., which has the most available on-land storage, weighing on domestic prices. At the same time, Brent prices have been boosted in recent weeks by bad weather, which hampered Iraqi exports, and concerns that violence in Libya could interrupt the country’s oil output.
The two contracts are trading about $10 a barrel apart, up from zero in mid-January but down from more than $12 in late February.
As experts debate whether oil prices are at or near a bottom, their views on the “WTI-Brent spread” – as the price difference between the two benchmarks is known – differ too.
BNP Paribas SA said in a note Tuesday that it expects the price difference to widen to $12 a barrel in May, as growing stockpiles continue to push U.S. prices lower.
But research firm Energy Aspects said in a report Monday that it expects the spread to narrow in May as Brent prices fall. The firm attributed Brent’s recent strength to “one-off factors,” like Chinese and Indian strategic stockpiling, and expects prices to weaken due to higher output from Iraq and lower demand during spring refinery maintenance.
Capital Economics, meanwhile, said Tuesday that it expects the benchmark prices to converge later this year, but because U.S. prices will rise. “This disconnect is largely due to issues specific to WTI … [and] overstates the weakness in global oil prices,” the firm said.
(Excerpt) Read more at blogs.wsj.com ...
the stuff is everywhere
If they release Iran from the sanctions that is going to be more oil coming online too.
“We are awash in oil” is exactly what I have been saying for the past few years.
The WTI price is down to $43.46 per barrel today.
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