🏄 Grow your portfolio even on vacation with InvestingPro | Summer Sale 50% OFFCLAIM SALE

Brent-WTI Touches Last Year's Low

Published 03/20/2013, 02:17 PM
Spread Narrows -- Driven By U.S. Crude Transport Fundamentals

Brent-WTI spread touched a low not seen since July of last year. North American crude has moved closer to being priced by the international oil markets.
Brent-WTI
Source: Ycharts

WSJ
: The price gap between the world's two most-important oil contracts shrunk to the narrowest in nearly eight months Tuesday, as new transportation links helped U.S. oil futures extend gains versus Europe's Brent crude.

Increasing pipeline capacity and rising rail shipments in recent months have helped shrink an oil-supply glut in the middle of the U.S. that has weighed on domestic oil prices.

After start-up issues in January, the newly expanded Seaway Pipeline is set to increase oil shipments to the Gulf Coast later this year. Rail transport of oil also has more than doubled over the past year, according to industry statistics, moving crude to refineries along the coast that didn't have access to domestic crude output.

And last week, operators of the Longhorn pipeline reversed its flow to send oil from west Texas to refineries along the Gulf Coast, further relieving the glut.

The new transport links, part of a broader transformation of the U.S. from energy consumer to major energy producer, are showing signs of overcoming a two-year struggle to move oil from new fields in North Dakota, Texas and other regions to the refiners pumping out gasoline and other fuels.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads.

Crude supplies in Cushing, OK -- the deliverable on the WTI futures contract -- are still elevated, but have stabilized relative to historical trends.
PADD II (Cushing) crude stocks (source: EIA)
It will take considerable amount of time for the "convergence" between these two markets -- the infrastructure is still not fully there. There is also always going to be a basis between Rotterdam and the U.S. Gulf delivery points. But we are seeing signs that the days of outsize spreads between the two benchmarks may be coming to an end.

Which stock should you buy in your very next trade?

AI computing powers are changing the stock market. Investing.com's ProPicks AI includes 6 winning stock portfolios chosen by our advanced AI. In 2024 alone, ProPicks AI identified 2 stocks that surged over 150%, 4 additional stocks that leaped over 30%, and 3 more that climbed over 25%. Which stock will be the next to soar?

Unlock ProPicks AI
Read Next

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.