The Brent crude oil premium to West Texas Intermediate rose to the highest in a month after a report that BP Plc was shutting down the largest of three crude units at its Whiting, Indiana, refinery, the biggest in the U.S. Midwest.
The Brent premium is also supported by planned field maintenance and reports of output disruption in the North Sea. The U.S.'s Apache Corp. will idle two of its North Sea oil platforms for routine maintenance starting Aug. 10, while ConocoPhillips has stopped oil exports from its J-Block field because of the closure of the CATS gas pipeline in the area.
U.S. refinery shutdowns ``will put in question the extent of the upcoming U.S. crude stock draws,'' Olivier Jakob, the managing director at Zug, Switzerland-based Petromatrix GmbH, said today in a report.
Brent's premium to WTI, priced in Cushing, Oklahoma, was $3.23 a barrel at 10:06 a.m. in London. Brent has traded at an average of $1.22 more than WTI in the last 12 months.
WTI, the grade for futures trading in New York, has traded at a discount to Brent since February. The spread reached a record $6.54 a barrel on May 24 and was as low as 73 cents on June 29.
Demand for crude in Cushing fell this month after the Verdigris River in Kansas flooded an oil refinery in Coffeyville owned by a unit of Goldman Sachs Group Inc. and the New York private-equity firm Kelso & Co.
source:bloomberg.com
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