Not surprisingly, London crude oil prices rose today. There are two interesting things to observe here. First, the FT article states that
In London IPE Brent crude prices for May delivery were trading up 42 cents at $30.55 per barrel at 1115 GMT having been as high as $31.65 per barrel earlier in the day.
Notice these data on Friday’s closing prices from Bloomberg Energy News:
Nymex Crude 35.38 -0.63
Dated Brent $ 31.61 -0.30
The price difference between the main US market and the main European market is quite interesting. I am not an expert in the differences between the light sweet (i.e., with sulfur removed) crude and Brent crude (which is largely from the North Sea deposits), but as with most financial markets when these two prices diverge substantially there’s always an interesting story. Any ideas? My thoughts are that the US is still more substantially feeling the effects of the Venezuela supply shortfall (a supply side reason), and that with the reformulated gasoline turnover season in the US about to start, there’s an increase in demand.
Second, the FT article points out that the 40-cent increase in London today is a small spike relative to the $1.62/barrel decrease last week, which has been variously attributed to either the anticipation of a short, successful war or the delay of a war.