Crude is supposed to be fungible and the discounts/premiums for one or the other crude will reflect the blend demand. The current premium paid for Brent has nothing to do with specific demand but more to do with the geographic issues since most Middle Eastern crudes are the basis for the supply to Europe and the risk premium for European supply is greater. Today's $14.52 premium for Brent is approaching the highest premium levels since just before Mubarak's fall.
The other issue weighing in on the market is the high price of gasoline and the probable demand destruction for the product as prices stay at the $3.50/gallon level or rise upwards to $4.00. Cushing inventories continue to be at the highest levels ever and despite the loss of Libyan production, global crude supply is more than sufficient.
The increases today were muted despite the Libyan stalemate and the likelihood of little, if any production, coming from there. The Nigerian elections are set for April 16 and more than 50 people have been killed since the election season began.
Today, WTI +47¢, $108.71; Brent +27¢, $122.19; RBOB -1.22¢, $3.1853; HO +0.20¢, $3.1865.
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