“Brent crude fell, shrinking its premium to U.S. oil to less than $15 a barrel for the first time since January, as Cyprus prepared to vote on a bank levy amid renewed concern that Europe’s debt crisis will worsen.
Futures lost as much as 0.8 percent in a second daily decline, narrowing the premium to West Texas Intermediate to the least since Jan. 18. Cypriot lawmakers are scheduled to vote today on how to spread the burden of raising 5.8 billion euros ($7.5 billion) from bank depositors to unlock emergency loans. A report today may show U.S. crude supplies rose to the highest level since June.
“The number one story in the markets is still about an island in the Mediterranean with approximately 1 million inhabitants,” said Michael Poulsen, an analyst at Global Risk Management in Middelfart, Denmark, adding that oil prices will probably remain “fairly balanced.”
Brent for May settlement slid as much as 88 cents to $108.63 a barrel on the London-based ICE Futures Europe exchange, trading for $109.15 at 12:04 p.m. local time. Volumes were 17 percent below the 100-day average. The European benchmark was at a premium of $14.75 to WTI for the same month.
WTI for April delivery, which expires tomorrow, was at $94.02 a barrel, up 28 cents, in electronic trading on the New York Mercantile Exchange. The more-active May future gained 30 cents to $94.41. The volume of all futures traded was 7 percent above the 100-day average. The front-month contract climbed 29 cents to $93.74 yesterday, the highest close since Feb. 20.