Oil prices showed a mixed performance Tuesday, with US West Texas Intermediate (WTI) crude on track for its highest close since June 2022. This surge comes as a deadline approaches for Iran concerning the Strait of Hormuz.
Brent futures saw a slight dip, settling at US$109.48 a barrel. However, WTI crude rose significantly, reaching US$114.99. This price inversion, where WTI now trades at a premium to Brent, reflects market demand for barrels for earlier delivery.
Analysts point to a "prolonged disruption scenario" rather than an immediate resolution as the driving force behind WTI's gains. The premium for WTI's front-month contract over the second-month contract is also hitting record highs, signaling acute tightness in the prompt market.
Refiners in Europe and Asia are reportedly paying near US$150 a barrel for certain crude grades, underscoring a worsening supply crisis.