Brent-WTI crude oil spread 

Brent-WTI crude oil spread was $4.84 per barrel on July 30, down from $5.17 per barrel on July 23. The price difference between Brent and WTI oil futures is called the Brent-WTI spread. The spread declined ~6.4% from July 23 to July 30.

The Brent-WTI spread narrowed due to the supply outage in Canada. On July 13, Syncrude Canada said that it would cut 35% of crude oil deliveries to its customers in August. The supply outage could limit the crude oil coming to Cushing, Oklahoma. However, market intelligence company Genscape estimates that Cushing crude oil inventories rose 200,000 barrels from July 24 to July 27.

Brent–WTI Spread Drops ~6.4% in the Last Five Sessions

A Reuters survey estimates that US oil inventories could have dropped by ~3.15 MMbbls from July 20 to July 27. These factors supported WTI crude oil relative to Brent prices. The API and the EIA are scheduled to release the oil inventory data on July 31 and August 1, respectively.

Brent-WTI crude oil spread 

The Brent-WTI spread hit $11.40 per barrel on June 7, which was the highest level since February 2015. A high spread usually motivates US oil producers to export more crude oil, and a wider spread also benefits US crude oil refiners like Valero (VLO), HollyFrontier (HFC), and CVR Energy (CVI). These stocks dropped 3.5%, 2.4%, and 3.3%, respectively, from June 7 to July 30 as the spread decreased.

The Brent-WTI spread has dropped 58% from June 7 to Jutheir ly 30. The narrowing Brent-WTI spread reduces US oil producers’ price disadvantage compared to international peers. Pioneer Natural Resources (PXD) and Continental Resources (CLR) fell 3.6% and 2.1%, respectively, from June 7 to July 30.

Next, we’ll cover the WTI Cushing-WTI Midland crude oil spread.

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