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The
monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil extended
its gain for a second month, rising $4.92 to $59.37 per barrel in May. The price
increase coincided with a weakening U.S. dollar, the lagged impacts of a 158,000
barrel-per-day (BPD) decrease in the amount of oil supplied/demanded in March
(to 19.2 million BPD), and a rollover in accumulated oil stocks. The monthly
average price spread between Brent crude (the predominant grade used in Europe)
and WTI widened by $0.08 in May, to $5.15 per barrel.
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Futures traders ended the data-collection period with a sour dispositions; however, 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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