A Short Comment on the Oil Market

This is a chart comparing the prices of the March 2011 Brent Crude futures contract with the Nymex Light Sweet Crude contract. The darker line on the price chart is the Brent Crude price series.

Notice the divergence between the 2 in recent days, as US Light Sweet Crude moved lower while Brent, being the international benchmark, has stayed high.

I'm bringing this up because there is a tendency for the financial news media to report on oil prices based on the US contract rather than Brent. Here in Singapore, our oil is NOT priced against the US contract. As such, make a mental note if you hear on the news that oil prices are coming down. They are not.