For the past few months, the global crude oil benchmark, WTI, has been trading lower than other crude varieties. No longer. On Friday, WTI closed higher than Dated Brent, $45.52 vs. $44.85.
The spread between current and future prices for crude also narrowed a bit. The weak US dollar, mounting US unemployment figures, and a possible production cut by OPEC all contributed to the price rise. ETF US Oil Fund (NYSE:USO) and ETN GSCI Crude Oil Total Return Index (NYSE:OIL) both closed higher on Friday. There’s still too much crude in storage and on ships sailing around in circles waiting for the price to go up. The problem is that it’s mostly heavy, sour crude, not light, sweet WTI.
Paul Ausick
March 9, 2009
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