Oil’s Hottest Trade Accelerates as Key Spread Goes Negative
- Relative costs of Europe, Mideast benchmarks turn upside down
- Revaluing, possible rerouting of shipments expected: traders
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One of the hottest trades in the oil market this year is keeping on rolling, with the potential to reshape the value of physical crude cargoes and transform global flows.
The price differential between swaps for London’s Brent and Middle East’s Dubai crude has turned deeply negative, data from brokerage PVM show. It’s a dramatic shift from the start of the year — and normal trading patterns — when the spread was at a sizable premium. It was at a discount of $1.60 a barrel on Monday, compared with a more than $3 premium in January.