Brent crude dropped to the lowest level in almost 17 months, narrowing its premium over West Texas Intermediate, on concern global supply growth will outpace demand.
The European benchmark settled below $100 for the first time since April 2013. World petroleum supply will increase by 1.6 million barrels a day this year while consumption will rise by 1 million, the Energy Information Administration forecast today. WTI narrowed its discount after Platts said Tallgrass Energy Partners LP may delay the Pony Express pipeline from Wyoming to Cushing, Oklahoma, to November.
“The very fundamental view right now is that demand is falling and supply is still pretty fat,” said Stephen Schork, president of the Schork Group Inc. in Villanova, Pennsylvania. “There is really nothing to lean on in this market to help support it.”