WTI oil futures hit $108 and overtakes Brent for first time since 2010
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US WTI oil futures have hit $108 a barrel and for the first time since 2010 the American NYMEX crude contract has overtaken European Brent prices as pipeline and rail shipments helped clear a bottleneck that reduced the price of the US benchmark on the market.
Latest WTI Oil Price
US Light crude oil futures for September 2013 delivery was trading at $108.23 a barrel, 08:33 GMT this morning in electronic trading on the NYMEX. WTI averaged $17.47 less than Brent in 2012 and traded as much as $23.44 lower than its European counterpart in February this year.
Balance in the Market
Improved pipeline networks and the use of rail links are helping to ease the North American oil glut created by rising production of crude from shale formations. WTI has jumped 18 percent this year, while Brent has decreased 2.5 percent as North Sea supplies stabilised after maintenance.
“The price change reflects the changing balance in the market. It’s the perception of traders that you are not going to have the surplus in the US longer term. We are having more rail and pipeline capacity.”
said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts.
“The dynamics are changing. It’s a sign that oil is not just sitting in Oklahoma anymore. We are getting oil out of the storage to the market.” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago.
US crude inventories dropped 6.9 million barrels in the week ended July 12 to 367 million, the lowest level since January 18, the US EIA (Energy Information Administration) reported last Wednesday.
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WTI oil futures hit $108 and overtakes Brent for first time since 2010
