The geopolitical dimension of crude futures pricing took center stage today as WTI rose moderately while Brent increased significantly on news that Iran was sending warships through the Suez Canal with the potential of a confrontation with Israel. There are also anti-government demonstrations in Bahrain, Yemen and Libya that are weighing on the minds of government officials and traders. The differential between WTI and Brent grew to $18.88 as crude and gasoline inventory continued to build in the U.S. while any armed conflict in the Middle East will probably curtail shipments of oil to Europe. Some see this impending conflict as being deliberately provoked by Iran to get Iranians to think of something else other than the demonstrations against the Regime.
Traders and analysts who make their living off the volatility of the markets having been upset because the large supply stocks in the U.S. are limiting the market's volatility while Europe is more affected by the Middle East crisis and any threats to supply there.
Today, WTI +64¢, $84.97; Brent +$2.15, $103.85; gasoline +5.63¢, $2.5467; distillate +4.51¢, $2,7751.
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