Oil buying frenzy sparked by supply disruptions and evidence that the Omicron variant won’t be as disruptive as anticipated has propelled some crude grades to multi-year highs, implying that the Brent futures surge could go a lot longer, traders say.
Physical freight prices do not always trade in lockstep with oil futures prices, and widening differentials can signal speculators have oversold or overbought futures compared to fundamentals.
Brent oil futures have risen 10percent since the start of the year, but the physical market is still accelerating, with differentials for some grades reaching multi-year highs, indicating that the futures gain will be pushed on by a tight market.
“These are insane figures. Physically, there is a lot of tension” a North Sea oil broker commented.
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