13 Jan 2015
WTI-Brent Spread nears parity
FXStreet (Mumbai) - WTI-Brent Spread is fast approaching parity as Brent Crude prices fall faster on concerns of Organization of Petroleum Exporting Countries (OPEC) inaction.
The spread currently hovers around -0.36. Brent Crude futures declined sharply after UAE defended the OPEC’s decision to hold production unchanged amid a rout in oil prices. “The strategy will not change, by not reducing output, we are telling the market and other producers that they need to be rational", said UAE’s oil miniter Suhail bin Mohammed al-Mazroui.
Moreover, WTI Crude may outperform Brent prices as the US economy is showing signs of strength with massive job gains across the sectors. The fall in Brent prices has been rapid despite China Crude imports in December hitting a record high of 30.37 million metric tons. Hence, the WTI-Brent spread may hit parity if the OPEC continues to play down the concerns of falling oil prices.
The spread currently hovers around -0.36. Brent Crude futures declined sharply after UAE defended the OPEC’s decision to hold production unchanged amid a rout in oil prices. “The strategy will not change, by not reducing output, we are telling the market and other producers that they need to be rational", said UAE’s oil miniter Suhail bin Mohammed al-Mazroui.
Moreover, WTI Crude may outperform Brent prices as the US economy is showing signs of strength with massive job gains across the sectors. The fall in Brent prices has been rapid despite China Crude imports in December hitting a record high of 30.37 million metric tons. Hence, the WTI-Brent spread may hit parity if the OPEC continues to play down the concerns of falling oil prices.