BUNKER INDEX :: Price Index, News and Directory Information for the Marine Fuel Industry

« News Home
:: Monthly Archive

News Topics
:: Air Pollution
:: Agreements & M&A's
:: Alternative Fuels
:: BunkerBlog
:: Cargoes & Storage
:: Company News
:: Efficiency, Costs & Charges
:: Environment
:: Events
:: Financial
:: Fuel Quality & Testing
:: Lubes & Additives
:: Oil Spills
:: People
:: Port News
:: Projects
:: Regulation, Legal
:: Services, Products,Technology
:: Statistics & Research
:: Vessels

Regional Archive
:: Americas
:: Asia/Oceania
:: Europe
:: M.East/Africa

BUNKER INDEX :: Price Index, News and Directory Information for the Marine Fuel Industry
Home » News

WTI-Brent spread highly volatile and large drops in equities market

By A/S Global Risk Management.

Michael Poulson, Global Risk Management. Image credit: Global Risk Management

Updated on 26 Jun 2018 08:27 GMT

Lately, the difference between the two reference crudes of the world, Brent and WTI, has had a volatile time. Two weeks ago, the difference between them was more than $11, and yesterday it opened with a difference of $4.49. It is rarely seen that the difference - also referred to as the spread - is this volatile, and the explanation is of course to be found in the Brent and WTI crude oils.

Saudi Arabia pushed through an agreement in OPEC+ to increase crude output by 1 mbpd, and, furthermore, stated that it could offset any shock to production as it has a spare capacity of 2 mbpd. This is bearish for Brent and has likely weighted on the crude since it was in the upper 70s.

The U.S. crude oil hub in Cushing, Oklahoma, receives 360 kbpd of synthetic crude from a facility in Canada. Currently, that facility is down, meaning that those 360 kbpd cannot reach Cushing. The outage is expected to last until the end of July. This is bullish for WTI and therefore the spread has narrowed quickly during the last week. Brent, however, went north yesterday - concluding in the spread widening and currently being about $6.55.

Looking to the financials. Yesterday, the equities market took a huge step southward likely as trade wars and politics have been increasing risk lately. Specifically, China and the European Union vowed to oppose protectionism and have agreed to defend the multilateral trading system as the trade war between the United States and China tightens. The U.S. is planning to impose tariffs on $34 billion of Chinese imports from July 6, and President Trump has further threatened to impose levies on another $200 billion of Chinese goods. This could potentially cut half a percentage off China's economic growth.

Later today, the API is releasing its U.S. inventory stats.

A/S Global Risk Management is a provider of customised hedging solutions for the management of price risk on fuel expenses. The company has offices in Denmark and Singapore. For further details about its risk management products and services, please call +45 88 38 00 00 or email hedging@global-riskmanagement.com.

Related Links:

Where to go from the OPEC meeting
A/S Global Risk Management Ltd.

Latest News:

Oil and fuel oil hedging market update
Singapore records best ever October bunker sales; YTD volume down 1%
Oil trading below $70 after highly volatile start to week
Genoil lowers fuel sulphur content in latest processing run
Aegean staff have been relying on compensation and benefits to support families: EY
Higher bunker prices help push up Hanwa's overseas revenue
Aegean doesn't have a centralized accounting system: EY director
Oil and fuel oil hedging market update
Brent heads back upwards after breaking below $70 on Friday
Aegean's proposed bidding process revealed
Aegean proposes bidding timeline as Mercuria offers $681m
Genco to decide on scrubbers for 15 bulkers by early 2019 - 'if not before'

Page Links:

Latin America
Middle East
North America
North Europe
South Europe
Index Summary
Price Highlights
Las Palmas
New Orleans
Rio de Janeiro
Latest News
Middle East
Air Pollution
Agreements & M&A's
Alternative Fuels
Cargoes & Storage
Efficiency, Costs & Charges
Fuel Quality
Lubes & Additives
Oil Spills
Port News
Services, Products, Technology
Statistics & Research
Contact & Terms
Contact Us
Terms & Conditions
Privacy Policy
Upcoming Events