Trump's Blow to Iranian Oil Sparks Curious Price Divergence



Trump's Blow to Iranian Oil Sparks Curious Price Divergence
The relationship between two major oil benchmarks is charting an unexpected course.

Apart from the sanctions, worries over available spare capacity and a surge in profits from producing gasoline and gasoil compared with heavier residual fuels has lifted sentiment for light-sweet oil, which is typically easier to process and turn into lucrative products such as diesel.

“Profits from producing distillates versus fuel oil in Asia have surged, supporting light-sweet Brent crude while weighing on the heavier grades such as Dubai,” said Den Syahril, a Singapore-based senior analyst at industry consultant FGE. “With crude markets as finely balanced as they are now, traders taking large positions in the oil-futures market can cause a pronounced impact and cause wild swings in benchmarks such as Brent.”

To contact the reporter on this story: Serene Cheong in Singapore at scheong20@bloomberg.net. To contact the editors responsible for this story: Pratish Narayanan at pnarayanan9@bloomberg.net Anna Kitanaka.


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