On June 24, Brent crude oil active futures settled ~$6.96 higher than the WTI crude oil active futures—the lowest level since April 9. On June 17, the spread was at $8.77.
In the past five trading sessions, Brent crude oil August futures have risen 6.4%—4.6 percentage points less than the rise in WTI or US crude oil July futures. During this period, the United States Brent Oil ETF (BNO) has risen 6.8%—4.3 percentage points less than the rise in the United States Oil ETF (USO). BNO tracks Brent crude oil futures, while USO tracks US crude oil futures. The fall in oil inventories for the week ending June 14 might be behind the contraction in the spread.
Factors that could impact US oil exports
The above chart shows the generally 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. From December 2015 to the week ending on June 14, US crude oil production rose ~33% to 12.2 MMbpd (million barrels per day)—near its record level.
In the same week, US crude oil exports rose by ~0.3 MMbpd to ~3.4 MMbpd. US crude oil exports rose by ~1.05 MMbpd year-over-year. However, with the contraction in the spread, US crude oil exports might fall in the coming weeks. Next week, the OPEC plus meeting will likely be important for the Brent-WTI spread. If OPEC and its allies increase the magnitude of the production cut, the Brent-WTI spread could rebound. If OPEC doesn’t reach a consensus, the Brent-WTI spread might contract more.