WTI oil trading at $85, spread with Brent now at $19 pbl

17 February 2011 17 February 2011

BonTrade

WTI oil futures open today’s trading session hovering around $85 a barrel, while the spread between oil price contracts with Europe’s Brent crude widen to record highs, near $19 a per barrel.

Latest WTI Oil Price

US Light crude oil futures for March 2011 delivery was trading at $85.04 a barrel, 04.15 GMT this morning on the NYMEX. The March WTI futures contract expires tomorrow.

Warships in the Middle East

Oil prices climbed yesterday as new anti government protests broke out in Libya and Israel’s foreign minister claimed that Iran is about to send two warships through the Suez Canal on the way to Syria.

“The face of the Middle East is changing in pretty dramatic fashion in a very short period of time. The risk to oil supply is going up.” according to PFGBest oil analyst Phil Flynn.

WTI Oil Futures Undervalued?

The spread between WTI oil futures and Europe’s oil contract are now trading at around $19 a barrel apart, while Brent oil futures on the ICE Futures Exchange continues to move higher above $104.

This begs the question as to if WTI oil futures are undervalued, as although US crude oil supplies remain at reasonable levels, the fact remains that the US does indeed import as much as 70 percent of it’s daily crude oil usage from other countries.