Brent maintains Iran premium over WTI

Brent crude futures prices moved close to $69 a barrel as lingering tensions between
Iran and the west continued to lift oil prices.

Since 15 British sailors and marines were captured 12 days ago, the Brent price has continued to trade at a wide premium to its US counterpart, the West Texas Intermediate contract. Brent is now trading at a $3 premium to the US benchmark. Rarely has the price difference being so wide.


ICE Brent for May delivery gained 48 cents to $68.58 a barrel in late London trade. Brent prices are up 13 per cent over the past two weeks, a similar margin to the WTI price over the same period. May WTI slipped 30 cents to $65.59 a barrel in early afternoon trade on the New York Mercantile Exchange.

Traditionally, WTI trades at a premium to Brent, but the European benchmark can be more sensitive to political developments in the Middle East as it is the main reference price used by the region’s exporters. WTI is the reference for US oil imports.

Another factor behind the price gap is that the physical delivery point for the Nymex WTI contract is Cushing in Oklahoma, where oil storage levels are near capacity according to energy analysts. This means that there is excess oil in the most important storage centre in the US, although it is not reflective of the total US oil storage situation.

Financial Times