Brent/WTI

G

GJB

I'd like to get a general opinion on the outlook for Brent/WTI. The dec10 is at -1.66 as I type.

Technical or fundamental, all views welcome.

Thanks

GJB
 
Following the US crude inventories drop Brent rose more than WTI, extending Brent's premium over WTI.

As far as I understand it, and I may have it wrong, Brent is more a representative of global demand and WTI more representative of US demand, or so I have read.

So why does the drop in US inventories cause Brent to rise more than WTI?

There's probably a nice obvious answer here but at the moment I don't see it.


Many thanks

GJB
 
I am new to energy but I will give it a shot. I believe the drawdown in US crude inventories would cause Brent to rise because traders believe that Brent supply will be transported to the US to fulfill demand. The price rise is mostly due to fundamental demand supply but I think a proportion is due to the transportation costs of moving this supply to the US.
 
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