Chart of the Day: The Brent Premium Is Nearly $10 Right Now

I’ve got no special reason for posting this, but if you’d like a 30-second break from the insane tawdriness of the Kavanaugh affair, here’s a chart about oil prices:

The two most widely traded grades of oil are Brent Crude and West Texas Intermediate. Most of the time their price in the global market is close to identical, but for the past year Brent has been selling at a significant premium. That premium has bounced up and down, but for most of September it’s hovered just under $10 per barrel. Why?

No one knows for sure. There are some fundamental differences between Brent and WTI, but they’re small and haven’t really changed much lately. The best guess seems to be that Brent commands a premium when traders are nervous about the Mideast oil supply—though I’ll confess that the explanations for this don’t make a lot of sense to me. Regardless, that seems to be the conventional wisdom: when things get worse in the Middle East, both the Brent premium and the price of oil in general get higher. And right now they’re both getting higher.