Why is crude oil in London more expensive than that in new york?

The crude oil traded in London is Brent crude oil, mainly from the North Sea, and the crude oil traded in new york is West Texas Intermediate (WTI), mainly from the western United States. From the quality of both, the sulfur content of WTI is less than that of Brent crude oil (0.24% vs. 0.37%), so in theory, the price of WTI (new york crude oil) should be slightly higher than Brent crude oil (London North Sea Brent crude oil). Historically, the price difference between them is $ 3-6 per barrel, that is, London Brent crude oil is $ 3-6 lower than new york crude oil.

However, the situation has changed incredibly. The price of Brent crude oil in London North Sea is getting higher and higher, which is higher than that of new york crude oil, especially since the autumn of 20 10. The transaction price of London North Sea Brent crude oil of 20 10 was $23 higher than that of new york crude oil. Even after the sharp drop of 20 12 on June 20th, the price difference between them still reached $ 10 (that is, the original oil price in new york was $8 1.8 and the original oil price in London was $92.69).

There are two explanations for this anomaly:

1. One view is that the main factors that determine the price difference between the two crude oils are the supply and demand relationship and the corresponding refining capacity. After the exploitation of Beihai Oilfield, the reserves gradually decreased, while the oil refinery in Cushing, Oklahoma, USA was full and had no spare refining capacity, which led to a record of crude oil reserves in the United States and depressed the price of WTI crude oil. Surplus American crude oil is not easy to transport to Europe. In addition, the war in the Middle East has affected local crude oil production and reduced supply.

2. Another view is that a big country in the Asia-Pacific region has been depressing the price of Brent crude oil in the North Sea. The domestic oil price adjustment mechanism of this big country is calculated according to the Brent price in the North Sea. For the benefit, the price of Brent crude oil in the North Sea has been relatively firm!