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CHAPTER ONE
Developments in Global Markets
crudes) reached around $2.5/b in 2012 compared with $5.1/b in the
previous year. The same applies for the price of OPEC basket, which
was $2.1/b lower than the price of Brent crude in 2012 compared
with $3.8/b in the previous year.
Those developments in price differentials can be attributed to
several factors, including the increase in the supplies of light crudes
in Libya after the return of production prior conflict levels, and the
increase in US light crudes and liquids which resulted in a decrease
in US imports of light crudes and products which was one of the
reasons behind the slight decrease in the price of U.S. West Texas oil
during the year compared with the previous year.
As for the West Texas intermediate (WTI) crude, which is a
reference for light and low sulfur crude oils, it has been suffering
since 2007 from logistics limitations, especially its isolation from
other global markets. Its prices are moving in such a way that is
not related to fundamentals of the global market . Traditionally, the
differences between the prices of WTI and Brent which are both
similar in quality tend to be in favour of WTI, but a differential of
$17.2 /b was in favour of Brent in 2012. Even more the price of high-
quality WTI crude was less than the prices of some lower quality
crudes. The differential between U.S. light crude and Dubai was at
$14.7/b in favour of Dubai and $14.8/b compared with the average
price of OPEC basket of crudes during the year.
Table (1-9)
and
Figure (1-9)
show the developments of differentials
among the annual average prices of OPEC basket, U.S. light crude,
Brent and Dubai for the period 2008-2012.
Spot prices for various Arab crudes followed the same general
trend, since they went up in 2012 compared with their levels in 2011
