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FX.co ★ Traders boost WTI exports to Europe

Traders boost WTI exports to Europe

Traders boost WTI exports to Europe

A widening spread between the Brent and WTI futures as well as lower shipping costs allowed traders to earn on US crude exports to Europe. In recent months it was impossible because of oversupply of raw materials on the global market and unfavorable shipment conditions.
The premium for Brent futures relative to WTI crude was at the level of $1, while last week it rose above $1.50 barrel, the highest level in three months. Changes in market conditions prompted traders to ship crude overseas.
According to Bloomberg, traders try to sell crude on higher priced markets. Such an approach allows traders to get profit from a difference in prices on different markets and delivery dates. These deals known as arbitrage. Some traders claim arbitrage is advantageous now, but not all market participants are ready to make such deals.
For July, traders chartered tankers for crude shipments from the Gulf of Mexico to the European part of the continent. WTI crude has high demand as well as Eagle Ford crude and Texas-Oklahoma crude.
United States President Barack Obama lifted the decades-long ban on exporting crude in December 2015, but opportunities to ship out US crude were limited by a global supply glut in oil and unfavorable shipment terms. In 2016, crude exports from the US started to increase.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade
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