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The
monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil edged
up off its lowest price in six years, rising $5.97 to $53.79 per barrel in April.
The price bump coincided with a weakening U.S. dollar, the lagged impacts of a 147,000
barrel-per-day (BPD) increase in the amount of oil supplied/demanded in February
(to 19.4 million BPD), and a seemingly unstoppable accumulation of crude oil
stocks (to the highest levels in about 80
years). The monthly average price spread between Brent crude (the
predominant grade used in Europe) and WTI narrowed by $3.00 in April, to $5.07
per barrel.
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With
futures prices in “contango” (i.e., near-term contracts are priced lower than
later-term contracts), we do not expect significant additional fallout in spot
oil prices.
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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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