The nearest U.S. crude oil delivery contract traded Thursday at the biggest premium in history over the subsequent month, after President Donald Trump vowed to bomb Iran for weeks . West Texas Intermediate prices for May delivery rose more than 11% to close at $111.54 per barrel, or more than $13 above the June price of $98.04 per barrel. It is the biggest spread between the front month and second month in history dating back to 1983. U.S. crude oil prices fell 1.24% on Wednesday to close at $100.12 a barrel before Trump’s national address on the war. Trump’s previous suggestions that war could quickly end have been effective at depressing prices, said Bob McNally, president of Rapidan Energy. @CL.1 YTD mountain WTI year to date The market had the perception that this nightmare can’t go on, McNally said. Prices started rising during Trump’s speech as it became clear that a quick end to the war was not in sight. “I suspect there’s a lot of shorts who were betting on Trump declaring a ceasefire of some sort and they were sort going into the close,” McNally said. “The speech was bullish and so now we’re seeing some short covering in the May contract on the settle.” Also Thursday, the spot price for current physical cargoes of Brent crude oil soared to $141.36, the highest level since the 2008 financial crisis , according to S & P Global, which tracks the data. The spot price reflects the demand for Brent oil that will be delivered in the next 10 to 30 days. The high price for more immediate oil deliveries points to the tightness of physical supply right now due to the huge disruption trigged by the Iran’s closure of the Strait of Hormuz .
