Brent oil price for actual cargo soars to $141, highest level since 2008
The spot price for current physical cargoes of Brent crude oil soared Thursday to $141.36, the highest level since the 2008 financial crisis, according to S&P Global, which tracks the data.
The spot price reflects the demand for Brent oil that will be delivered in the next 10 to 30 days. The high price for more immediate oil deliveries points to the tightness of physical supply right now due to the huge disruption trigged by the Iran’s closure of the Strait of Hormuz.
The price was $32.33 higher than the Brent crude futures contract for June delivery, which closed at $109.03 on Thursday.
The futures price is “almost giving a false sense of security that things are not that stressed,” said Amrita Sen, founder of Energy Aspects, in an interview with CNBC’s “The Exchange.”
“You are seeing it but the financial market is almost masking the true tightness that everywhere else is showing up,” Sen said. The price for a barrel of diesel in Europe is almost $200 per barrel right now, she said.
Chevron CEO Mike Wirth warned last week that the futures price is not reflecting the scale of the oil supply disruption to the closure of the Strait. Wirth said the market is trading on “scant information” and “perception.”
“There are very real, physical manifestations of the closure of the Strait of Hormuz that are working their way around the world and through the system that I don’t think are fully priced into the futures curves on oil,” Wirth said at the CERAWeek by S&P Global energy conference in Houston on March 23.
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