WTI-Brent Spread Narrows to $2 in Race to $100 bbl Mark


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Oil futures on the New York Mercantile Exchange and 
Brent on the Intercontinental Exchange extended their rally and traded above 
$90 bbl Friday (3/6), with increasing shortages in oil looking set to tip the 
crude benchmarks towards the $100 mark as the U.S.-Iran war intensifies.

   The rally was fueled by Iran's decision to block the Strait of Hormuz that 
borders its coastline, freezing transit on a waterway where some 21 million bpd 
of energy liquids pass. 

   The Brent-WTI spread narrowed significantly to just under $2 bbl at Friday's 
peaks for both benchmarks, from Friday's settlement of $5.46. The narrowing 
spread, due to Brent's relatively higher pricing, reflects growing concerns 
over global crude supply which Brent is an indicator of.

   NYMEX WTI crude futures for April delivery settled up $9.89, or 12%, at 
$90.90 bbl after reaching $92.61 earlier, its highest since September 2023, as 

   The spread between WTI's April and May contracts widened to nearly $4. The 
front month of the U.S. crude benchmark itself has risen 35% since its 
settlement of February 27, which marked the eve of the start of U.S.-Israeli 
airstrikes against Iran.

   ICE Brent crude for May delivery settled up $7.28, or 8.5%, to $92.69, after 
hitting a 2-1/2 year high of $94.64. The global crude benchmark is up 27% for 
March. The spread between Brent's April and May contracts widened to nearly $6.

   The RBOB futures contract for April delivery approached two-year highs while 
those of distillates neared 3-1/2 year peaks.

   RBOB futures for April delivery rose $0.0831 to climb to $2.7540 gallon, 
after surging to $2.7630, a high since April 2024.

   The NYMEX ULSD futures contract for April shipments rose $0.0036 to $3.6179 
gallon after reaching $3.7485, a peak not seen since November 2022.

   Qatar's Energy Minister Saad Sherida Al-Kaabi warned that crude prices could 
surge to $150 bbl within two to three weeks if Middle Eastern production halts 
and storage capacities are exhausted due to the ongoing regional conflict.

   The last time crude traded at or above $100 bbl was in the first six months 
of Russia's war on Ukraine. Gasoline futures soared by more than 50% during 
that time, with front-month RBOB futures breaching the $3 gallon mark and even 
$4.

   The U.S. Dollar Index fell by 0.329 points on Friday to 98.995 against a 
basket of currencies.

   The U.S., in one of its first responses to the growing global energy crisis, 
announced a 30-day reprieve on Russian sanctions to allow Indian refiners with 
limited supply capacity to immediately access Russian oil already at sea.

   U.S. President Donald Trump earlier this week offered U.S. maritime 
insurance assistance, as well as naval protection to oil tankers needing to 
cross the Strait of Hormuz.




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