Brent oil price at $111, spread to US oil widens near record
SylviaHunt30Brent oil futures open today’s trading session near $111 a barrel as recent gains for oil prices see the spread between Brent and US WTI oil contracts widen back to records levels on demand concerns in Europe.
Latest Brent Oil Price
In London, Brent crude oil futures for November 2011 delivery was trading at $111.18 a barrel, 06.15 GMT this morning on the ICE Futures Exchange. The contract closed off Wednesday’s session at $111.10.
Record Oil Spread
Perhaps the most interesting characteristic of the market in recent days has been the renewed widening of the spread between Brent and the benchmark US WTI NYMEX contract oil, which had been on a narrowing trend in recent weeks after hitting a historic high of $26.67 in early September. It dropped to $22.90 last week, but shot back to $26.30 on Wednesday.
Some analysts said they believe the rise in Brent oil prices may be due to supply problems in Europe and Africa.
On Tuesday, the Dow Jones UBS Commodity Index said it would decrease the weighting of WTI by about 5 percent and add Brent to the index for the first time in the same proportion.
“Since that was announced, there’s been two big jumps in Brent and nothing to justify it. It’s been the biggest feature of the day.” said Dominick Chirichella, an oil analyst at the Energy Management Institute.
China Oil Demand
Meanwhile, China, the pillar of global oil demand growth, saw its September crude oil imports down 12.2 percent on a daily basis from a record high rate a year earlier and stood below a 5.0 million bpd mark for the fourth consecutive month. This came despite analysts expected a gain in demand.
“The fall in crude imports could be attributed to either weak demand or a draw down in inventories. We can wait for the inventory data for September, but I’m leaning toward weak demand.” said Brynjar Bustnes, a analyst for JP Morgan, Hong Kong.
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Brent oil price at $111, spread to US oil widens near record
