Global physical oil price benchmarks surged to multi-year highs on Thursday, with signals of tight supply in the U.S. crude market also intensifying.
On Thursday, April 2, Dated Brent crude prices touched $141.37 per barrel, the highest level since 2008, marking a significant jump from over $128 the previous day.
Dated Brent crude is one of the most important global oil pricing benchmarks, widely used to guide the pricing of approximately two-thirds of global crude oil trade.
Meanwhile, the May WTI crude contract saw a single-day gain of up to 13.8%, with U.S. crude settlement prices exceeding $110 per barrel for the first time since 2022.
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As reported by Wallstreetcn.com, Trump's hawkish signals in a national televised address caused market expectations of a swift end to the conflict to rapidly reverse. Oil prices immediately surged, triggering strong market concerns about sustained near-term crude oil supply tightness.
<h2>Physical Oil Prices Break $140, WTI Near-Month Spread Hits Record High</h2>
Dated Brent crude prices climbed to $141.37 per barrel on Thursday, surpassing the peak levels seen during the Russia-Ukraine conflict in 2022 and marking the highest record since 2008.
Dated Brent crude refers to Brent crude with a confirmed loading date, reflecting the actual trading price of North Sea crude for immediate shipment.
The Strait of Hormuz, which handles nearly a quarter of the world's oil and natural gas transport, continues to face severe transit restrictions. Signals of supply tightness in the U.S. crude market are also escalating rapidly.
The WTI crude near-month spread, the price difference between the two nearest expiring contracts, widened to a premium of over $16 per barrel on Thursday, the largest on record.
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When near-month contract prices are significantly higher than forward contracts, it typically indicates extremely tight expected near-term supply.
Frank Monkam, Head of Macro Trading at Buffalo Bayou Commodities, stated:
<blockquote>
The war premium following Trump's speech is concentrating in the near-month contracts, causing the near-month spread to widen sharply.
</blockquote>
Traders indicated that this surge was driven by two forces: first, a rapid unwinding and reversal of bearish bets on a quick end to the conflict; second, substantial purchasing of U.S. crude by buyers from regions like Asia, leading to expectations of a significant tightening in the U.S. crude market in the coming weeks.
<h2>Oil Prices Nearly Double Year-to-Date, Exacerbating Inflation and Growth Concerns</h2>
The ongoing conflict in the Middle East continues to disrupt global energy markets, with U.S. oil prices nearly doubling since the beginning of the year.
Domestic retail gasoline prices have surpassed $4 per gallon, reaching their highest level since 2022, consequently increasing inflationary pressures.
The sustained surge in oil prices is fueling market concerns about a resurgence of inflation alongside an economic slowdown, presenting investors with a more complex macroeconomic environment.
Trump's hawkish tone has shattered market expectations of an impending end to the conflict, forcing investors to reassess the possibility of prolonged supply disruptions.
The International Energy Agency has classified this crisis as the most severe supply shock in oil market history, and its duration remains highly uncertain.

At 9 p.m. Eastern Time on Wednesday, Trump delivered a national address, claiming a "rapid and decisive victory" in the US military's war against Iran and stating that core strategic objectives were nearing completion. He emphasized that Iran would never be allowed to possess nuclear weapons and called the US strikes on Iranian nuclear facilities a "huge success." Regarding the Strait of Hormuz, Trump encouraged countries to "take responsibility for themselves" without providing a clear timetable for its reopening. Escalating tensions in the Middle East have put markets on edge, and the US military may intensify its strikes in the coming weeks. Will the US-Iran conflict end quickly as Trump hopes? How will the energy market evolve?

At 9 p.m. Eastern Time on Wednesday, Trump delivered a national address, claiming a "rapid and decisive victory" in the US military's war against Iran and stating that core strategic objectives were nearing completion. He emphasized that Iran would never be allowed to possess nuclear weapons and called the US strikes on Iranian nuclear facilities a "huge success." Regarding the Strait of Hormuz, Trump encouraged countries to "take responsibility for themselves" without providing a clear timetable for its reopening. Escalating tensions in the Middle East have put markets on edge, and the US military may intensify its strikes in the coming weeks. Will the US-Iran conflict end quickly as Trump hopes? How will the energy market evolve?

Trump's tough stance: Is the war with Iran nearing its end?

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The global physical oil price benchmark, Dated Brent crude, surged to $141.37 per barrel on Thursday, a new high since 2008. WTI crude saw a daily increase of 13.8%, with its settlement price surpassing $110 for the first time since 2022. A hawkish speech from Trump shattered market expectations of an end to the conflict, coupled with restricted transport through the Strait of Hormuz, leading to record-high near-month spreads and a sharp increase in supply tightness signals

- Global physical oil prices have surged to a 16-year high, with Brent crude reaching $141.37 per barrel, the highest since 2008.  
- Supply concerns in the U.S. oil market have escalated, driven by geopolitical tensions and a reversal in market sentiment after Trump's strong address about the ongoing conflict.  
- The WTI crude spread hit a record premium, reflecting expectations of tight supply in the near term as inflation pressures mount alongside fears of slowed economic growth.

Wallstreetcn

Occidental Petroleum

HSPC

BP p.l.c.

United States Oil Fund LP

Spot Shortage! Prompt Brent Crude Surges Past $140, U.S. Crude Spot Premium Hits Record High, Futures Settle Above $110 for First Time in Four Years