Oil Price: Solid oil demand is driving up the spot crude prices in every part of the world. This is a clear indication that the physical oil market is finally catching up with the recent rally in the paper market.
” … And he who earns wages,
Earns wages to put into a bag with holes.” Haggai 1:6
By the God of your father who will help you, iAnd by the Almighty who will bless you With blessings of heaven above, Blessings of the deep that lies beneath, Blessings of the breasts and of the womb.” Genesis 49:25
The strengthening appetite for crude in Asia and tightening regional markets due to changed differentials between regional benchmarks are, in turn, supportive of the oil futures rally, analysts and traders tell Reuters.
The surging premium of Brent over the Middle Eastern benchmark Dubai now makes shipping crude grades from the Atlantic Basin to Asia uneconomic because they are priced off the Brent benchmark. So Asian demand for Middle Eastern and Russian grades priced off the Dubai benchmark is high, driving the spot premiums for Omani crude and Russia’s ESPO and Sokol grades close to a one-year high.
At the same time, the narrowing discount of WTI Crude to Brent Crude is effectively shutting the arbitrage for U.S. crude to go to Europe and Asia as the less-than-$2 a barrel spread makes shipping American oil to the major import markets uneconomical.
As a result of these dynamics in spreads between regional benchmarks, physical crude supply in each of the regions is tightening. Read More