On March 11, Brent crude oil May futures settled ~$9.8 higher than the WTI crude oil April futures. On March 4, the spread was ~$9.1. In the past five trading sessions, the Brent crude oil May futures rose 1.4%—one percentage point more than the rise in WTI or US crude oil April futures. In the last five trading sessions, the United States Brent Oil ETF (BNO) has risen 1.6%—1.1 percentage points more than the rise in the United States Oil ETF (USO). BNO tracks Brent crude oil futures, while USO follows US crude oil futures.
The fall in the oil supply might have supported oil prices. The fall in oil supply is outside the United States, which is pushing Brent harder than the WTI grades of oil.
US crude oil exports
The above chart shows the broadly positive relationship between US crude oil exports and the Brent-WTI spread since December 2015. Exports seem to follow the Brent-WTI spread with a lag. When the US lifted the ban on US crude oil exports in December 2015, US crude oil production started rising. Since December 2015, US crude oil production rose ~31.8% to a record level of~12.1 MMbpd (million barrels per day) in the week ending on March 1.
In the same week, US crude oil exports fell by ~0.6 MMbpd from the second-highest record level to ~2.8 MMbpd. However, US crude oil exports rose by ~1.3 MMbpd year-over-year. The expansion in the Brent-WTI spread might increase the US oil supply to foreign countries.
Brent-WTI spread and US energy companies
While a widening Brent-WTI spread is good for US refiners and US oil exporters, it’s a disadvantage for US oil producers selling in the US market. A narrowing spread has the opposite impact. However, US upstream stocks like ConocoPhillips (COP) might benefit from a higher Brent-WTI spread. Downstream stocks like Phillips 66 (PSX) and Valero Energy (VLO) are also sensitive to the Brent-WTI spread.