Oil Spreads Weaken as Freight Surge Menaces World’s Crude Flows
- Brent and WTI spreads decline as global shipping costs soar
- Benchmark supertanker rates topped $300,000-a-day on Friday
Photographer: Ali Mohammadi/Bloomberg
This article is for subscribers only.
The spectacular surge in the cost of chartering oil tankers is rippling through the crude market, as fears that shipments will be constrained begin to weigh on gauges of market strength.
The nearest WTI contract is trading at a discount to the following month -- a bearish market structure known as contango -- while its Brent equivalent also slumped last week. The move reflected concerns that the usual shipments of key grades of crude from the North Sea, Russia, West Africa and the U.S. will be crimped, leaving an excess of oil with nowhere to go, traders said.