Longer-term contracts also indicate the spread may keep declining next year. The difference between the WTI and Brent December 2012 contracts was $11.80 a barrel today, compared with an average $2.99 in the past 12 months, according to data compiled by Bloomberg.

"It's very risky," said David Wech, an analyst at JBC Energy GmbH, a research company in Vienna. "I wouldn't expect the spread to grow much further. In fact, it will probably narrow in coming weeks."

Brent's premium over WTI has almost doubled in the past six weeks as seasonal maintenance at North Sea oilfields and attacks on Nigerian oil facilities reduced availability of light crude oil already curbed by the unrest in Libya.

"Brent is overdone, overbought and quickly becoming more susceptible to a downside correction," said Dominick Chirichella, senior partner at the Energy Management Institute in New York. "I am becoming more convinced that WTI is more representative of what is going on in the global oil world."

Royal Dutch Shell Plc declared force majeure on Bonny Light oil loadings from Nigeria for this month and July because of multiple fires on the Trans Niger pipeline, the company said in an e-mailed statement on June 13. Supplies from Libya, which pumped almost 1.6 million barrels a day in January, have all but stopped amid the armed rebellion against Muammar Qaddafi.

Brent may face a "crisis of confidence" as its gains highlight a dependence on a limited amount of production, according to Olivier Jakob, managing director of Petromatrix GmbH, a Zug, Switzerland-based researcher.

"Global markets will continue to search for a crude oil benchmark that does not fall hostage to the economics of a micro market," Jakob said in a June 14 report.

Eoin Treacy's view Brent supply has been curtailed by maintenance closures, force majeure in Nigeria and North African civil wars, all of which have conspired to drive prices higher. Concurrently, increased supply hitting the Cushing terminal in the USA coupled with reduced demand due to the slow pace of economic recovery and competition from low natural gas prices have slowed WTI crude's advance. (David's piece on this spread posted in Comment of the Day on Tuesday may also be of interest).

The spread between Brent Crude and West Texas Intermediate hit a peak near $22.30 yesterday and fell to $18.84 which is a sizeable downward dynamic and probably marks a peak of medium-term significance.

WTI crude prices fell to test the lower side of the six-week range yesterday and a clear upward dynamic would be required to question scope for additional downside.

Brent crude prices formed a big key day reversal yesterday and held most of the decline today suggesting another peak of at least short-term significance has been reached. A sustained move back above $120 would be required to check scope for a further decline.

The persistence of high oil prices have been a headwind for the global economy. This has already led to slowing growth and dimmed expectations for future expansion. Oil's deterioration from the late April peak is a welcome sign but Brent crude probably needs to sustain a move back below $100 before it ceases to offer a significant barrier to growth expectations.