Dubai: The Brent WTI (West Texas Intermediate) spread rose to $9 per barrel on Tuesday, its highest since August, and indications are it may widen further as a huge build-up in WTI inventories and supply disruptions in Libya are favourable for Brent, analysts said.

On Tuesday, Brent crude traded at $61.97 per barrel, up 0.93 per cent, at a premium of $9.09 per barrel over Nymex WTI crude, which traded at $52.88.

“The trend will continue, and the spread could further widen towards $11-13 in the coming weeks. Gains in Brent is outpacing WTI due to strong demand from emerging economies for Brent and also supported by supply worries,” said Gnanasekar Thiagarajan, director at Commtrendz Research.

Brent crude has received some support from the Libyan crisis and the Nigerian election which both are posing a current and a potential future threat to supplies. This has helped reduce some of the supply surplus in North Sea Brent thereby removing some of the selling pressure, said Ole Hansen, head of commodity strategy at Saxo Bank.

Egypt on Monday bombed Islamic State targets in Libya, where violence has reined in most oil output, and Iraq’s semi-autonomous Kurdistan Regional Government threatened to withhold oil exports if Baghdad failed to send its share of the budget.

Brent may gain further, widening the spread even further. “Technical signals warn of an intermediate bottom in brent at $45. We expect a test of $67 in the short-term followed by $72-74 or even higher to $80 in the medium-term,” said Commtrendz’s Thiagarajan.

Rising production of WTI

WTI meanwhile is suffering relatively from rising production and rising inventories at Cushing, which is the delivery hub for WTI crude oil futures traded in New York.

Since October inventories at this important hub has more than doubled to 42.6 million barrels and this trend is expected to continue during the coming weeks and months further adding relative pressure on WTI crude, said Saxo Bank’s Hansen.

Crude stocks at Cushing increased by 1 million barrels to 38.87 million barrels in the week ended February 6. These levels are almost double compared to early December of 2014.

Cushing, Oklahoma, is the delivery point for NYMEX crude futures contracts. It’s where a lot of supply sources of crude oil meet a lot of demand sources for that crude oil.

“Only when we see a sizeable pickup in demand and or a reduction in production the spread may begin to converge again. So far a cut in production remain elusive despite the ongoing sharp drop in US rig count,” said Hansen.