The Brent-WTI price gap is shrinking, raising US influence on global oil markets
The spread can have significant global implications for crude, extending all the way to the pump
The ever-narrowing price gap between the world’s twin crude oil benchmarks — Brent and West Texas Intermediate — has profound consequences across the supply chain for various stakeholders in the oil industry, including producers, refiners, traders and even consumers.
The futures prices of WTI and Brent oil over the past 13 years are heading much closer.
On June 30, 2011, Brent commanded a premium of $17.06 a barrel against WTI on futures exchanges. Fast forward to today, that premium has dwindled to a mere $3.14.
The narrowing gap is largely beneficial for US producers as they benefit from higher relative prices for WTI-priced crude, while European sellers of Brent-linked crudes may see reduced premiums.
However, the case is reversed for consumers.
“A wider spread often means lower prices for US consumers and higher prices for European consumers, while a…
