The spot WTI contract is hovering around the unchanged level after a huge build in crude oil stocks reported by the API last evening (more details below).
The API reported a larger than projected build in total crude oil stocks and larger than the decline in stocks reported the previous week. The rise in stocks was related to the return of the Houston Ship Channel. Further pressuring the WTI contract is the 240,000 barrel build in Cushing stocks. This is the first build in Cushing in the last several months with crude oil inventories declining about 14.5 million barrels since January.
The Brent/WTI spread has widened marginally overnight but has been hovering around the $5 to $5.25/bbl support area for most of the week so far. The Cushing build coupled by the ongoing tensions in the Ukraine have contributed to the widening overnight. That said the two smaller Libyan ports of Zuetina and Hariga (combined capacity of about 180,000 bpd) is almost ready for exports as a deal has been done. Exports from the two larger ports will depend on a revenue sharing deal getting done over the next two to four weeks. If Libyan oil exports do actually return in a significant way it will certainly have a negative impact on the Brent/WTI spread going forward.
Global Equities have been trading in a volatile pattern over the last several days. The EMI Global Equity Index drifted lower since yesterday declining by 0.2 percent. The Index is showing a year to date loss of 1.2 percent which is still near the best level of the year. Japan remains at the bottom of the list while Canada continues as the best performing bourse in the Index. Brazil has finally moved into positive territory for the year after spending a significant period of time in negative territory. Global equities have been a neutral to negative price driver for the oil complex.