Sharp price drop for Brent reduces benchmark's spread over WTI to narrowest margin in two-plus years
14 May 2013
Oil futures prices declined in April on seasonally weaker demand. Brent fell by around $6.10/bbl to $103.40/bbl amid a surplus of light, sweet grades in Europe, and last traded nearly unchanged at $103.10/bbl. In contrast, WTI inched down by just $0.90/bbl to an average $92.05/bbl, and by early May bounced back up to $95.50/bbl.
The WTI‐Brent futures price spread fell to its narrowest in more than two years, contracting to about $7.75/bbl in early May from an average $11.35/bbl in April, $16.58/bbl in March and $20.75/bbl in February.
The global oil demand forecast was raised by a marginal 65 kb/d for 2013, to 90.6 mb/d, due mainly to upward revisions to German gasoil data for 2012. The global growth forecast is unchanged at 795 kb/d.
The non‐OPEC supply forecast was raised by 50 kb/d to 54.5 mb/d for 2013 on rebounding output in South Sudan and strong North American oil sands and tight oil production. Annual growth remains projected at 1.1 mb/d after US and Australia data revisions raised the 2012 estimate by 0.1 mb/d.
The "call on OPEC crude and stock change" for 2Q13 fell by 400 kb/d to 28.9 mb/d on higher OPEC NGLs and non‐OPEC supplies. OPEC ministers gather in Vienna on 31 May to review the market outlook.
The Oil Market Report (OMR) is a monthly International Energy Agency publication which provides a view of the state of the international oil market and projections for oil supply and demand 12-18 months ahead. To subscribe, click here.
The release of the Oil Market Report for May coincides with the release of the Medium‐Term Oil Market Report 2013.
Photo credit: © Shutterstock.com