ETC Etfs CRUDE OIL - Etfs BRENT (1 Viewer)

risparmier

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As prices slump, Nymex oil seen losing relevance

With WTI futures below international prices, are they a 'broken benchmark?'



MarketWatch
Last update: 8:19 a.m. EST Feb. 18, 2009
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WTI's pricing anomalies have upended the crude's value as a basis for setting physical prices, the IEA noted in its report.
The weakness in WTI futures has stemmed from excessive inventories at Cushing, Okla., the delivery point for Nymex futures. WTI has traded lower than Brent before, but this time the gap is particularly wide: It hit more than $10 last month, the most since Brent and WTI began trading in the futures market.
On Tuesday, front-month Brent futures closed at $41.03 a barrel on the IntercontinentalExchange, while front-month WTI ended at $34.93 on the Nymex.
The artificially low WTI prices mean oil users could pay a much higher price than WTI when they trade physical oil with producers. It also means investors putting money in Nymex futures or oil exchange-traded funds linked with Nymex could see prices rally when Cushing inventories wane, as the Nymex contract rises back above levels of Brent and other global contracts.
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WTI futures have also been trading lower than Brent, which historically tends to be cheaper than WTI. That's because WTI is of higher quality, and the cost of shipping oil across the Atlantic is priced in if the U.S. imports Brent from Europe.
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http://www.marketwatch.com/news/story/nymex-oil-loses-glow-international/story.aspx?guid=%7B00C1AF3A%2D52C4%2D44DE%2D860E%2DF8620447A9E9%7D&dist=TNMostRead
 
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