Oil Rises in Volatile Spread Trading


NEW YORK, July 23 (Reuters) - Oil futures edged higher on Tuesday in volatile trading in the closely watched spread between international benchmark Brent and U.S. crude oil futures.

Brent's premium to U.S. oil futures , which had narrowed sharply last week and briefly inverted on Friday, weakened for a second straight day in whipsaw trading that saw swings of nearly $1.75.

The spread, which settled at $1.21 a barrel on Monday, narrowed to $1.06 during European hours before widening out to $2.68, near the 14-day moving average, in early U.S. activity. It closed at $1.19 as U.S. crude, also known as West Texas Intermediate, staged a late rally relative to Brent, before narrowing to 98 cents in post-settlement activity.

The Brent-WTI spread trade has gripped markets this month, narrowing from near $6 at the start of July and over $23 a barrel in February on expectations new pipeline capacity will alleviate a glut of oil at the Cushing, Oklahoma delivery point for the U.S. crude contract by shipping it to the Gulf Coast.

Walter Zimmermann, chief technical analyst for United-ICAP in Jersey City, New Jersey, said that it was still early to tell if the move marked a reversal of the narrower spread, but added it could be poised to move in further.

"The bigger picture suggests that WTI just completed a bull market correction, then almost certainly the WTI-Brent spread is heading higher."

Front-month September Brent crude oil traded up 27 cents to settle at 108.42 a barrel.


View Full Article

Copyright 2016 Thomson Reuters. Click for Restrictions.


Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.


Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
Technical Sales- Decontamination/Chemical Cleaning Services
Expertise: Sales
Location: Baton Rouge, LA
Account Manager - Western US - Vapor Control & Degassing
Expertise: Sales
Location: Long Beach, CA
Sales Manager - Vapor Control/Degassing Services
Expertise: Sales
Location: Houston, TX
search for more jobs

Brent Crude Oil : $51.78/BBL 0.77%
Light Crude Oil : $50.85/BBL 0.83%
Natural Gas : $2.99/MMBtu 4.77%
Updated in last 24 hours