US CRUDE prices fell 2% yesterday, with the benchmark US crude contract pushed to a three-month low near 74 a barrel by record stockpiles in the US Midwest, while London Brent eased to 80.
The two-main benchmark contracts have diverged significantly over the past week. Rising global energy demand and hopes Europe’s debt crisis can be tackled have seen Brent rise for three of the past four days, while US crude prices have been falling since Tuesday.
Stockpiles of crude at Cushing, Oklahoma, the delivery hub for the US contract, have risen for the past eight weeks to stand at a record 37-million barrels, pushing US crude to its steepest discount to Brent since the peak of the economic crisis.
The euro zone debt crisis roiled energy markets last week, knocking US crude from a 19-month peak of 87,15 on May 3 to a three-month low of 74,51 four days later.
The number of US workers filing new applications for unemployment insurance also fell slightly less than expected last week, government data showed yesterday, while the number of people still drawing benefits unexpectedly rose, painting a mixed picture of the economic recovery.
US crude oil for delivery in June was trading down 1,47 at 74,18 a barrel later yesterday, while Brent was trading down 86c at 80,33 a barrel.
US crude normally trades at a premium to Brent oil.
“In general, Brent is acting as a much better benchmark for global fundamentals at the moment,” Barclays Capital analyst Amrita Sen said yesterday.
Cushing’s landlocked location means it tends to only reflect the supply and demand situation in the midwestern US, analysts said. Reuters
