- WTI eclipsed the major psychological level of $50/Bbl yesterday and has continued to rise through this morning
- The rally has boded well for U.S. basis differentials, with the prompt-month contract for Mid-Cush and MEH increasing by 25c to $1.50/Bbl, and $2.10/Bbl, respectively. Both basis differentials are trading at their highest levels since May
- Saudi Arabia hikes crude prices bound for the U.S. and Asian markets
- Saudi Aramco raised its flagship Arab Light grade to a $1/Bbl premium above the company benchmark for exports to Asia, its largest market. The $1/Bbl premium is the highest mark reached since last August
- All U.S. bound grade prices were lifted by 20c. The increase comes after the EIA reported Saudi exports to the U.S. reached zero for the first time in 35 years last week
- Oil market prepares for massive $9-Billion index buying spree (Bloomberg)
- As a result of the collapse in crude prices, the value of the futures contracts in the BSM and GSCI indices have dropped substantially. As a result of the re-balancing, the major indices are looking to purchase another 80 — 100 MMBbl of crude future contracts
- AEGIS notes that the re-balancing could drive prices higher over the next few days as the market increases its financial length. Still, estimates vary as to the size of the buying spree as JPM published a lower estimate of only $3 billion in crude purchases