(Bloomberg) — The American oil benchmark outpaced gains in the global marker after President Donald Trump announced tariffs that will limit supplies from the US’s two biggest foreign suppliers of crude.
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West Texas Intermediate (CL=F) rose as much as $2.65 a barrel on Monday, compared with $1.67 for Brent (BZ=F). The narrowing gap between the two grades shows the relative isolation of the US market and reduces the appeal of WTI, and varieties that are priced off it, for international buyers.
The US contract surged in anticipation the tariffs would lead to disruptions to imports from Canada — the biggest overseas supplier to its southern neighbor’s refineries — and Mexico. Concerns about the impact of Washington’s levies on global growth also appeared to weigh more on Brent.
“Given the importance of Canadian oil to the US, it is not surprising to see that WTI is trading stronger,” said Warren Patterson, head of commodities strategy for ING Groep NV in Singapore, adding that a rally in US gasoline and diesel futures has also “dragged WTI higher.”
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