Frequently Cited Oil Spread Moderates on Evolution of Transportation Options

The Brent-WTI spread’s blowout in late 2010 through 2011 made and lost many a small fortune. The spread was largely a result of unforeseen increased production running into transportation bottlenecks, creating an opportunity for everyone from railroad to barge owners as traders and refiners sought out lower cost inland crude (LLS, on the other hand, has continued to track Brent relatively closely). The response to these opportunities, along with record crude oil inventory builds in the United States, has led to a tightening of the spread thus far in 2013 (though it should be noted that 2012 saw a similar move to date). Download here