Crudes from the Middle East are off to a strong start this month as a major divergence in global benchmarks favors grades priced off Dubai oil, highlighting strong global demand at a time of surging prices.
Oman crude for loading in April was pegged at about $4 a barrel over Dubai prices, according to Bloomberg estimates. That’s up from late last month, when premiums averaged about $2.70. Interest in Dubai-linked cargoes has risen given their discount to benchmarks such as Brent and West Texas Intermediate, which most European and American grades are priced off, traders said.
Oil futures have soared to the highest level in seven years in the opening weeks of 2022, building on last year’s rally, as energy consumption recovers from the impact of the pandemic. In mid-December Brent, the most important global oil benchmark, was about $2.50 barrel more expensive than Dubai crude swaps; now that’s expanded to more than $4.50. The widening differential offers Middle Eastern crudes an edge in increasingly buoyant market.
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