Brent Quotations Grow even without Tehran’s Support
// Monitoring: oil prices
Brent oil, for the first time in 2007, jumped over the mark of $70 per barrel on Thursday at the NYMEX, a raw materials exchange in New York. Last time, this level was reached in August 2006. The quotations of September futures for Brent oil at the NYMEX then reached $70.2 per barrel, while the average spot supply prices needed just 4 cents to reach $70. No one doubts now the spot oil prices will remain above this level for some time.
The fact that Brent oil jumped over the mark of $70 per barrel is especially remarkable if we compare the conditions and news that pushed Brent up in August 2006 and in June 2007. The main cause of Brent’s growth in 2006 was the expectation of an exacerbated, up to armed, conflict between the U.S. and Iran due to Iran’s nuclear program. In June, the growth was caused by the news, published in the U.S., concerning a certain decrease in oil product stock, on the background of expecting several oil refineries in the region to be closed for reconstruction. Oil jumped to the record level of 2006 in just a few days, while the market was going slowly and confidently towards the high quotations of June 2007.
Bloomberg agency, with reference to traders of Macquaie Futures USA and BNP Paribas, who work at the NYMEX, pointed out another difference in the situations of 2006 and 2007: the gap between the quotations of Brent and WTI, the world’s two indicative sorts of oil, is rapidly reducing now. Just a month ago, WTI cost $6.5 less than more expensive Brent. The gap has now narrowed to $1.
Brent is the basis sort for determining the prices on oil supplied to Europe and Asia, including Urals oil. Meanwhile, WTI is a landmark primarily for the U.S. market. Since last summer, the gap between prices on Brent and WTI was quite large. The market thought that the problems affecting Brent are local, after all. The current Brent’s jumping over the mark of $70 per barrel is the evidence of oil demand and supply misbalance worldwide, including the U.S.
www.kommersant.com
All the Article in Russian as of June 29, 2007
|
