Brent trades near nine-month high

Comment on this story
OilRig http://www.sxc.hu/

Melbourne - Brent traded near a nine-month high in London amid concern that tension with Iran may lead to disruption of Middle Eastern exports.

Brent’s premium to US crude narrowed for the first time in nine days.

The European benchmark was little changed after rising for a fourth week, the longest run of gains since July. Iran won’t cede to pressure to halt its nuclear work, President Mahmoud Ahmadinejad said yesterday at a rally in Tehran to mark the 34th anniversary of the Islamic Revolution. Egyptian President Mohamed Mursi’s secular opponents geared up for marches today. Bank of America Corp. said there is a “growing risk” the North Sea grade will rally to $130 a barrel.

“The recent move higher for Brent came amid a combination of geopolitical jitters over potential supply disruptions if violence escalates in the Middle East,” said Andrey Kryuchenkov, an analyst at VTB Capital in London.

Brent for March settlement was at $118.31 a barrel, down 59 cents, on the ICE Futures Europe exchange at 11:05 a.m. London time.

The number of futures exchanged was 34 percent below the 100-day average.

The contract increased $1.66 to $118.90 on February 8, the highest since May 1.

The European benchmark grade was at a premium of $22.80 to the US benchmark, WTI. It closed at $23.18 on February 8, the widest since November 26.

The Brent-WTI spread has widened since Enterprise Product Partners LP said January 31 that capacity will be limited until late 2013 on its Seaway pipeline to the Gulf Coast from Cushing, Oklahoma, the delivery point for the New York contract.

China Imports

WTI crude for March delivery was at $95.51 a barrel, down 21 cents, in electronic trading on the New York Mercantile Exchange.

The contract slid 11 cents to $95.72 on February 8, the lowest since January 23.

The volume of all contracts traded was 29 percent below the 100-day average.

Goldman Sachs Group Inc. reiterated its forecast that the Brent-WTI spread will shrink to $7.50 a barrel in the second quarter as new pipeline capacity relieves a build-up of crude at Cushing, New York-based head of commodities research Jeffrey Currie wrote in a report.

Brent futures gained on February 8 after China reported that net crude imports were 24.87 million metric tons, according to data from the General Administration of Customs.

That’s equivalent to about 5.88 million barrels a day, the most since May.

$130 Risk

“With GDP growth set to accelerate in the second half of 2013 and limited supplies, we see a growing risk of Brent prices spiking to $130 a barrel this year,” Francisco Blanch, head of commodities research at Bank of America Corp. in New York, said in a report dated February 10.

Hedge-fund managers and other large speculators cut their net-long position in WTI for the first time in eight weeks, according to Commodity Futures Trading Commission data.

Managed money bets that prices will rise outnumbered short positions by 212,226 futures and options combined, a decline of 6,378, or 2.9 percent, in the week ended February 5, the regulator said in its weekly Commitments of Traders report on February 8.

The average price for regular gasoline at US pumps rose 24.75 cents a gallon in the past two weeks to $3.5918 a gallon, according to Lundberg Survey Inc.

The survey covers the period ended February 8 and is based on information obtained from about 2,500 stations by the Camarillo, California-based company.

The average is up 8.17 cents from a year earlier. It was the biggest jump since the two weeks ended March 4, 2011. - Bloomberg


sign up
 
 

Comment Guidelines



  1. Please read our comment guidelines.
  2. Login and register, if you haven’ t already.
  3. Write your comment in the block below and click (Post As)
  4. Has a comment offended you? Hover your mouse over the comment and wait until a small triangle appears on the right-hand side. Click triangle () and select "Flag as inappropriate". Our moderators will take action if need be.