Light Sweet Dire Divergence

Since the start of the New Year, a sharp divergence in the spread between Light Sweet West Texas Intermediate crude (better known as WTI) and Brent crude oil price has been a topic of heated conversation and debate in the trading community. With the Brent premium this morning hitting an all-time high in excess of $12 per barrel to the often-quoted WTI contract price, a host of questions are being raised from the physical relevance of these contracts to the potential impact on the world economy. A look back at the occurrence of this relatively new phenomenon, the factors, and what it means for the tanker markets, reveals some interesting trends. Readers beware, the results aren’t pretty. Download here