Brent-WTI Spread Impacts Downstream Companies



Brent-WTI spread and downstream stocks

Any expansion in the Brent-WTI spread could benefit US refineries (CRAK) and cause their input costs to fall. US refiners’ output prices are benchmarked to stronger Brent prices. A narrowing spread has the opposite impact. On February 15, the Brent-WTI spread expanded to $10.66—the widest level since October 19. On February 15–March 25, the Brent-WTI spread fell by ~$2.3, while the VanEck Vectors Oil Refiners ETF (CRAK) fell 0.6%.

Phillips 66 (PSX) and Valero Energy (VLO), which account for ~16.5% of CRAK, have returned -0.1% and 1.3%, respectively, since February 15.

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