The September WTI futures contract closed at $107.81 (up $1.46 on the day). The September Brent contract (Brent 1st nearby) closed at $108.70 (up 9c), putting the differential at under a dollar per barrel. The Brent-WTI spread has seen a spectacular collapse of some $20 in just 5 months.
The decline is the result of an improved (though still inadequate) transport system of crude oil from the Midwest to the Gulf Coast (both pipeline and rail). But as discussed earlier (see post), the more recent decline in spread is driven by a rise in refinery demand in the US (for example a large capacity upgrade at Motiva's Port Arthur Refinery), resulting in WTI price spike.
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| September WTI contract (source: barchart) |
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