Brent- WTI Spread Will Narrow
Occasional Memo: October 26, 2011
SUMMARY: The Brent-WTI spread has begun to narrow as WTI finds support from tighter PADD II fundamentals. Meanwhile, the Atlantic Basin light sweet crude balance is loosening, removing some of the fundamental support for Brent. In sum, the physical market will encourage a further narrowing of the spread even if the paper market dynamics encourage a strong Brent price.