The Brent and the WTI spread declines

Since the beginning of February of the current year, the spread between the main brands of oil Brent and WTI has decreased significantly, dropping to the level of the beginning of August last year at around 3.00 and continues to decline. Also, this period was marked by the release of oil from the side trend and the formation of sustainable growth. In turn, the reverse dynamics can be interpreted as return to flat.

With the growth in oil production in the US and the increase in world consumption, this dynamics indicates a significant increase in demand for American oil. As a result, the further increase in production in the US is expected. Also, the decline in the spread in the oil market often indicates a general decline in oil, which, under conditions of correction and growth in oil production in the US, can cause a rapid decline in major oil brands.

Chart of the spread of the Brent and the WTI. The current value is 2.85.

Hanzenko Anton