Dated Brent Surpasses $120 as Physical Crude Supply Tightens

Physical crude oil markets have tightened significantly, pushing European benchmark Dated Brent above the $120 per barrel threshold. At the same time, derivative contracts have moved lower, with ICE Brent futures falling toward $101 per barrel.

The widening gap between physical and paper benchmarks follows a period of sharp market volatility driven by several international developments. Contributing factors include European diesel inventory releases, reports of drone attacks against tankers in the Strait of Hormuz, and China reinstating a ban on refined product exports.

The resulting divergence underlines strong prompt demand and constrained supplies in the physical barrel market even as futures contract pricing softens.