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WTI Crude Oil Prices Rose despite Rising Crude Oil Inventories (Continued from Prior Part) WTI-Brent spread
WTI (West Texas Intermediate) crude oil prices over Brent crude oil prices turned from premium to discount in the middle of last week. They fell from $0.48 per barrel on January 15 to -$1.33 per barrel on January 20. As of the week ending January 22, 2016, WTI crude oil prices bounced back to trade at a $0.1 per barrel premium over Brent crude oil prices. However, the WTI-Brent spread converged by $0.47 per barrel on a weekly basis for the week ending January 22, 2016.
What drove the WTI-Brent spread?
The WTI-Brent spread was relatively narrow from 1993 to 2006. However, the US shale oil boom and overwhelming production from US crude oil producers resulted in the supply glut. This widened the WTI-Brent spread. It peaked at $29.70 per barrel in September 2011.
It’s expected that removing the US crude oil export ban could trim the supply glut in the US crude oil market. This could stabilize WTI crude oil prices (USO). WTI started trading at a premium over Brent crude oil prices by the end of December 2015. Lower distillate and gasoline demand started contributing to the inventory levels. WTI prices fell more than Brent prices. In the middle of last week, the WTI-Brent spread widened due to a rise in the inventory levels. In the end, it narrowed because a cold snap pushed the heating oil demand in the US.
Premium prices will allow US crude oil producers to sell their produced crude oil at higher prices compared to Brent crude oil prices. This allowed US crude oil producers like Murphy Oil (MUR), Chevron (CVX), ExxonMobil (XOM), Apache (APA), Murphy Oil (MUR), and Anadarko Petroleum (APC) to compete with international oil producers in terms of revenue generation.
Anadarko Petroleum accounts for 6.2% of the iShares U.S. Oil & Gas Exploration & Production ETF (IEO).
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Anadarko
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CODE : APC |
ISIN : US0325111070 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Anadarko is a exploration company based in Canada. Anadarko is listed in Germany and in United States of America. Its market capitalisation is US$ 38.6 billions as of today (€ 34.5 billions). Its stock quote reached its lowest recent point on May 12, 1995 at US$ 10.00, and its highest recent level on May 23, 2014 at US$ 99.93. Anadarko has 531 000 000 shares outstanding. |