Oil Futures Show WTI 2012 Discount Disappearing: Energy Markets
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The discount on New York crude for delivery in 2012 compared with North Sea Brent may disappear as the government restricts drilling after the worst oil spill in U.S. history.
Shipments for two years’ time have been cheaper on the New York Mercantile Exchange than Brent traded on London’s Intercontinental Exchange almost every day since April amid a surplus of West Texas Intermediate crude, the U.S. benchmark blend. With near-term deliveries of WTI regaining their premium as stockpiles diminish, history suggests that longer-dated futures will follow, according to Stephen Schork, president of consultant Schork Group Inc. in Villanova, Pennsylvania.