SEATTLE (Oil Monster): Prices for some physical oil cargoes in Europe have jumped to more than $130 a barrel on Tuesday, approaching record highs reached in April, as buyers rush to find alternatives to Middle East supplies facing increasing disruptions from intensifying conflict in the region.
Adding to disruptions linked to the Iran war, Saudi Arabia has cancelled late-September cargoes to European buyers after an attack on its East-West Pipeline last week forced it to suspend loadings from key Red Sea port of Yanbu, trade sources said.
Buyers on Tuesday were bidding the price of potential alternatives such as North Sea oil higher. North Sea Forties crude jumped to a price of $136.75 a barrel, according to LSEG data, approaching the all-time high of $147.37 hit on April 13 soon after the Iran war disrupted Middle East exports.
Oil futures prices rose by over $3 on Tuesday, with the Brent futures contract approaching $110 a barrel, on the Saudi loadings suspension and after Libya halted operations at three oil fields, heightening concerns that disruptions to supply routes could persist for weeks.
The price of physical cargoes is higher than that of crude futures such as Brent in part because the physical cargoes are for delivery in a few weeks, earlier than the oil traded in futures markets. The nearby Brent futures contract is for November delivery.
Courtesy: www.reuters.com
