Brent’s premium to West Texas Intermediate settled at less than $15 a barrel for the first time since July 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 $14.93 a barrel, the least since July 24. Brent prices slipped today as the Cypriot parliament defeated a measure imposing taxes on bank deposits. 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 3.3 percent this year, closing down $2.06 at $107.45 a barrel on the London-based ICE Futures Europe exchange today. The May WTI contract slid $1.59 to settle at $92.52 on the New York Mercantile Exchange.
Hedge funds and other money managers reduced bullish bets on Brent to the lowest in almost three months last week, data from the ICE Futures Europe exchange showed yesterday.
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 eased a glut at the U.S. storage center in Cushing, Oklahoma. Enterprise Products Partners LP and Enbridge Inc. switched the direction of the Seaway line last year to move barrels from the Midwest and Canada to Houston.
-- Editors: Raj Rajendran, Rob Verdonck