OPEC’s production cuts have put a floor under oil prices, at least for now. The resulting reduced supplies have also boosted the price of Middle East crude grades, and increased the spread between WTI and Brent. WTI is now trading at a discount of more than $2.20 compared to Brent. The current price differentials have made flows of U.S. crude oil to Asia commercially profitable after the Saudi-led production cuts resulted in higher Dubai and Oman benchmark prices against the U.S. benchmark WTI and the Brent benchmark. Therefore, commodity traders and oil supermajors are taking advantage of this arbitrage window to send more crude oil to the region with the world’s highest demand – Asia – which is the traditional stronghold of Middle East crude oil exports. But Middle Eastern exporters have been very carefully selecting which buyers to cut off as part of the OPEC output reduction, and […]