The difference between the world’s two most-traded crude oil grades shrank to less than $1 a barrel for the first time in about 2 1/2 years amid declining crude inventories in the U.S.
North Sea Brent crude’s premium to West Texas Intermediate narrowed to as little as 90 cents a barrel today, slipping to less than $1 for the first time since Nov. 12, 2010. WTI, the main U.S. crude grade, had been typically the more expensive grade until mid-2010. The convergence between Brent, a gauge for more than half the world’s oil, and WTI shows how improved pipeline networks and the use of rail links have helped to unlock a glut at America’s oil-storage hub at Cushing, Oklahoma.
The nation’s crude inventories fell by 6.9 million barrels last week to 367 million in their third weekly decrease, the longest run of declines this year, as refiners processed the most crude in almost eight years, the U.S. Energy Information Administration, part of the Energy Department, said yesterday.