August 2014 – Brent vs. WTI Prompt-Month Contract Analysis with ZEMA


NYMEX Crude Prompt-month Contract (Aug. 2014)

On the New York Mercantile Exchange (NYMEX), crude oil prices for NYMEX prompt-month contracts for Brent and Western Texas Intermediate (WTI) dropped for the second month in a row. By the end of the fourth Friday of August 2014, the prices of Brent and WTI dropped by 4% and 5%, respectively. When compared to the previous month, in August 2014 prompt-month contracts for Brent slid to $104 USD/Bbl, whereas the prompt-month contract for WTI sank to $97 USD/Bbl. In August 2014, data from NYMEX future settlements showed that Brent reached the lowest price levels in the past 12 months–$6 USD/Bbl below the August 2013 average price. The past 12-month averages for Brent and WTI on NYMEX are $109 USD/Bbl and $101 USD/Bbl, respectively.

The slightly larger drop in the European benchmark caused the Brent-WTI spread (represented by the purple area in the graph above) to hit $7 USD/Bbl. Also, the Brent-WTI spread has been $8 USD/Bbl on average over the past year.

The U.S. is currently at the center of attention as the market heads into maintenance season, during which time market participants will be aiming to reduce risk exposure. On the other hand, geopolitical tensions in the Middle East have continued, including U.S. air strikes in Iraq and the possibility of air strikes against Syria. Some strikes are in retaliation to the Islamic State terrorists who recently beheaded an American journalist in the region. Despite this, the global crude market tumbled in August 2014 as supply surged and demand declined.

The end of driving season in the summer and the encroaching refinery maintenance season weakened demand at a time when Libya and Iraq have swollen global supplies.[1] The increase in crude supply from Libya (612,000 barrels a day) and Iraq (300,000 barrels a day) came as the EIA forecasted U.S. production will reach 9.28 million barrels per day next year, the highest annual average since 1972.[2] The decline of global crude benchmarks may be attributed to strong supplies and tepid demand.



[1] “Crude Bets Tumble as Global Supply Surges,” Financial Post, August 25, 2014, accessed August 25, 2014, http://business.financialpost.com/2014/08/25/crude-bets-tumble-as-global-supply-surges/.

[2] Ibid.

Data Sources: CME


Next
Next

More Articles on Monthly Market Analysis

Introduction of new products and data sources October 2015 – Actual Weather (AccuWeather)

1. Monthly Temperature (AccuWeather) The ZEMA graph above shows average monthly temperatures according to AccuWeather for San Diego (red line), Chicago (green line), San Antonio (purple line), and New York City (blue line). ... Read more »

Data Sources: AccuWeather

Introduction of new products and data sources October 2015 – Electricity: Day-Ahead Prices (ICE)

The ZEMA graph above shows day-ahead peak electricity prices between October 1-28, 2015, as reported by ICE. The red line represents CAISO SP15, the green line represents PJM APS Zone, the purple line ... Read more »

Data Sources: ICE

Introduction of new products and data sources October 2015 – Gold and Silver Daily Prices (CME)

The ZEMA graph above shows gold and silver daily prices on CME between October 01 and November 05, 2015. The yellow line represents COMEX 100 Gold (USC/toz), the blue line represents COMEX 5000 ... Read more »

Data Sources: CME

Introduction of new products and data sources October 2015 – Crude Oil Brent vs. WTI: Forward Curve (NYMEX)

The ZEMA graph above shows this month’s Brent and WTI forward curves in comparison to last month’s forward curves, based on NYMEX average settle prices. Units are in USD/bbl.  Read more »

Data Sources: NYMEX

Introduction of new products and data sources October 2015 – Crude Oil Brent vs. WTI: Prompt-Month Contract (NYMEX)

The ZEMA graph above shows the price volatility of crude this year as demonstrated by the prompt-month NYMEX Brent-WTI spread. WTI is represented in red, Brent is represented in blue, and the ... Read more »

Data Sources: NYMEX

Introduction of new products and data sources October 2015 – North American Natural Gas Spot Prices (NYMEX)

The ZEMA graph above shows the North American natural gas spot prices on NYMEX for Henry Hub, Transco Zone 6, PG&E Citygate, and Chicago Citygates between October 01 – 28, 2015. Units ... Read more »

Data Sources: NYMEX

Introduction of new products and data sources October 2015 – Henry Hub Natural Gas Forward Curve (NYMEX)

The ZEMA graph above shows the spread between this month’s Henry Hub natural gas forward curve and last month’s forward curve, based off of average settle prices on NYMEX. Units are in ... Read more »

Data Sources: NYMEX

Introduction of new products and data sources September 2015 – North American Natural Gas Spot Prices (NYMEX)

The ZEMA graph above shows the North American natural gas spot prices on NYMEX for Henry Hub, Transco Zone 6, PG&E Citygate, and Chicago Citygates between September 01 – 28, 2015. Units ... Read more »

Data Sources: CME, NYMEX  |  Effective Date: September 30, 2015

Introduction of new products and data sources September 2015 – Henry Hub Natural Gas Forward Curve (NYMEX)

The ZEMA graph above shows the spread between this month’s Henry Hub natural gas forward curve and last month’s forward curve, based off of average settle prices on NYMEX. Units are in ... Read more »

Data Sources: CME, NYMEX  |  Effective Date: September 30, 2015

Introduction of new products and data sources September 2015 – Monthly Temperature (AccuWeather)

The ZEMA graph above shows average monthly temperatures according to AccuWeather for San Diego (red line), Chicago (green line), San Antonio (purple line), and New York City (blue line). The temperatures are ... Read more »

Data Sources: AccuWeather  |  Effective Date: September 30, 2015

 

Page 4 of 23« First...23456...1020...Last »