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The
monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil retreated
in June from the price “ceiling” of roughly $95 per barrel that has been in
place since September 2012, falling by $1.00 (1.1 percent) to $93.80 per
barrel. That price decrease coincided with a modest strengthening of the dollar,
the lagged impacts of still-tepid consumption levels -- including a rise of 77
thousand barrels per day (BPD) to 18.6 million BPD in April, and a falloff in
crude stocks.
The
monthly average price spread between Brent crude (the predominant grade used in
Europe ) and WTI shrank in May by nearly 24 percent, to $7.76
per barrel -- the smallest differential since January 2011. Brent and WTI
prices were essentially identical until the end of 2010.
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We
intend to resume providing commentary in August. In the meantime, however, we observe that
geopolitical tensions have apparently pushed futures prices higher during the
past month.
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The foregoing comments represent the
general economic views and analysis of Delphi Advisors,
and are provided solely for the purpose of information, instruction and
discourse. They do not constitute a solicitation or recommendation regarding
any investment.
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