Brent/WTI Crude Oil Spread – Complacency or Just Fundamentals??

Brent - WTI Crude Oil Spread May 2013

 

COMPLACENCY OR JUST FUNDAMENTALS??

  • Greatest risk level since early 2011 to sudden spread widening due to real or perceived supply disruption/ headline risk.
  • Supply/demand fundamentals continue to pressure the WTI/Brent spread lower towards the long term average of +/- $5.
  • As North American production continues to increase and replace imported oil increasingly the WTI/Brent spread will reflect and be contained to Brent oil price swings.
  • OPEC continues to reduce production, $90 per barrel price acceptable to OPEC and OPEC expects increase in demand from improving economies in the second half of the year. Continue reading