WTI-Brent Spread Reflects Dynamic Refinery and Infrastructure Pictures in US

There is increasing optimism that the economic recovery in the United States is on firm footing and strengthening. Indeed, the main concern articulated by many investors in the US is that the Federal Reserve will start to slow the growth of money supply due to continued economic recovery. Part of the reason for the comeback in the US is the rapid growth of domestic crude oil production. This phenomenon has received no shortage of attention from both the press and analysts, and the suddenness of it caused a supply glut within North America as transportation infrastructure struggled to keep pace. West Texas Intermediate (WTI), a popular light-sweet inland crude oil pricing benchmark, consequently fell in relation to the more globally traded Brent benchmark. The so-called “spread” between the two peaked near $30 a barrel in 2011, but has almost returned to parity as of this writing. Download here