Crude oil continues to march higher with WTI going to $102. Given the European backdrop, it's not clear what is driving this move.
WTI (Bloomberg)
Some attribute this to the reversal of the Seaway pipeline to take the oil out of Cushing, Oklahoma over to the Gulf coast (Bloomberg). That may alleviate some of the storage problem at Cushing where WTI contract is settled (and is credited for depressed levels in WTI). That may explain some the move today with WTI up and Brent down.
Bloomberg
But the spread between the two has now narrowed to below $10 per barrel in the last few weeks. Is the pipeline story the only explanation?.
Brent-WTI Spread (Bloomberg)
There are also rumors of hedge funds reversing the long Brent-WTI spread positions. Something else however has to be at play here. The US Midwest refineries are humming. Industrial production is up (up 0.7% in October). There is an argument to be made for some growth decoupling between Europe and the US that may explain more fundamentally this divergence in demand for fuel. More on that later.
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