Brent’s premium to West Texas Intermediate shrank to less than $15 a barrel for the first time in two months amid a recovery in North Sea crude production and concern that Europe’s debt crisis may worsen.
The European benchmark’s spread over WTI contracted to as little as $14.67 a barrel, the least since Jan. 18. Brent prices slipped today as Cyprus prepared to vote on a bank levy after two days of delays. Exports of the 12 main North Sea crude grades will rise by 6 percent in April to 2.02 million barrels a day, the highest level since June, according to loading programs obtained by Bloomberg News.
“We attribute the narrowing to factors weighing on Brent rather than factors favoring WTI,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt.
Brent futures have lost about 2 percent this year, trading at just above $109 a barrel in London today, while WTI has gained about the same amount on the New York Mercantile Exchange, to about $94. Brent was weakened by the return of North Sea oil fields from maintenance, while WTI advanced as new pipeline capacity helped relieve a supply glut.
Speculative bets that prices will rise, in futures and options combined, outnumbered long positions by 119,432 lots in the week ended March 12, the London-based exchange said in its weekly Commitment of Traders report. That’s down 11,796 contracts, or 9 percent, from 131,228 the previous week and is the lowest since Dec. 18.
WTI climbed this year as expanded pipeline capacity ease a surplus of crude building up at the U.S. storage center in Cushing, Oklahoma. Enterprise Products Partners LP (EPD) and Enbridge Inc. (ENB) switched the direction of the Seaway line last year to move barrels from the Midwest and Canada to Houston.
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