NEW YORK: Oil prices were mixed on Tuesday (Apr 7) with Brent futures flat, while US crude remains on track for its highest close since 2022, ahead of a deadline set by US President Donald Trump for Iran to open the Strait of Hormuz or face attacks on power plants and other infrastructure.
Brent futures LCOc1 fell 29 cents, or 0.3 per cent, to US$109.48 a barrel at 11.59am EDT (11.59pm, Singapore time), while US West Texas Intermediate crude CLc1 rose US$2.58, or 2.3 per cent, to US$114.99.
Typically WTI trades at a discount to Brent, but this has reversed in a market where barrels for earlier delivery command a higher price. The benchmark WTI contract is for May delivery while Brent is for June.
WTI was on track to close at its highest level since June 2022 for a fourth day in a row. At the end of March, when the Brent front-month was for delivery in May, Brent also closed at its highest since June 2022.
“WTI crude is … extending gains as the market leans further into a prolonged disruption scenario rather than a near-term resolution,” analysts at energy consulting firm Gelber & Associates said.
At the same time, the premium of the WTI front-month over the second-month CLc1-CLc2 was on track to close at a record high for a third day in a row.
“Time spreads have continued to widen, signalling that the tightness is most acute in the prompt market as refiners compete for immediately available barrels,” analysts at Gelber said.
European and Asian refiners are paying record-high prices of near US$150 a barrel for some crude oil grades, far exceeding prices for paper futures, highlighting the worsening supply crisis from the US-Israel war on Iran.