Just what's going on with oil? WTI is the best performing commodity this week, up by nearly 3%; it's now not far from $110 a barrel. Saxo Bank's Head of Commodity Strategy, Ole Hansen, says there are a number of factors at play and the rise in oil has taken many traders by surprise. He says both the demand and supply sides are "playing up". Improved economic data from the USA and China, the two biggest consumers of oil, has given the price a boost. At the same time, supply side worries include strikes in Libya and more problems in Sudan and Iraq. Ole also says the spread between WTI and Brent is also very interesting; it's close to parity. He says there's a lot of focus in the reduction of a supply glut in the US Midwest. It's being reduced quite sharply which is helping to bring WTI more in line with Brent at a time when demand for gasoline has been rising.
