From MoneyWatch:
One of the most popular trades in the oil market looks to have run out of steam.And from MoneyWatch's parent Wall Street Journal:
Since early 2011, traders have piled into the “Brent-WTI spread,” betting on the volatile price fluctuations between Europe’s Brent crude and Nymex-traded U.S. West Texas Intermediate crude, or WTI.
On Monday, the gap between the contracts shrunk to the narrowest level in more than two years, settling with WTI at a roughly $6 a barrel discount to Brent. Earlier this year, the gap was over $20.
The two oil contracts historically traded within a few dollars of one another, until surging U.S. production beginning in 2011 created a domestic supply glut and sent WTI tumbling compared to its European counterpart.
Now, traders say that the big swings that marked the trade since 2011 are probably over. New pipelines and rail links are connecting U.S. oil production to refineries on the Gulf and East Coasts, keeping stockpiles in the U.S. from bulging and weighing on U.S. prices....MORE
Texas' Next Big Oil Rush
New pipelines are beginning to carry a glut of domestic crude from the middle of the country to Texas' Gulf Coast, boosting the fortunes of the area's big refineries and further fueling a decline in oil imports.Magellan Midstream Partners' Longhorn pipeline began shipping oil from West Texas to Houston in April—the first of at least seven pipeline projects that could send as much as two million barrels a day from oil-saturated choke points in Oklahoma and the interior of Texas to the largest concentration of refineries in the country. But domestic oil production is at such a high level that the Gulf Coast refineries won't be able to process all of the crude.The pipelines, all set to come online by the end of next year, mark a new phase in the U.S. oil boom.
The spread peaked at over $25 in 2011. Here are some of our 2013 posts:Hydraulic fracturing has pushed U.S. oil output to its highest level in 17 years, but without adequate pipelines, much of the crude has been trapped at storage facilities, including domestically produced light, sweet crude at the massive storage hub in Cushing, Okla.Because that Oklahoma crude is relatively stranded, its price is depressed compared with prices of oil stored in other parts of the U.S. and in Europe. But with the new pipelines, as well as increased use of rail cars and barges to move crude, Cushing prices are expected to rebound.Light, sweet crude at Cushing is now trading at a discount of about $6 a barrel from imported European Brent crude, but far less than the $20 discount in February. Goldman Sachs Group Inc. says the discount could narrow to $5 by the third quarter as more pipeline capacity becomes available.Reuters Oil refineries like this one near Houston are expected to benefit from new pipelines carrying less-expensive crude from inland and Midwest sites. ...MUCH MORE
Brent-WTI Spread Narrows as Seaway Pipeline Readied to Move Oil From Cushing Bottleneck to Gulf Coast Refineries
Expanded Seaway pipeline start-up proceeds, crude flows--Next Steps: Double Capacity Again, Watch WTI-Brent Spread Shrink, Saudis Cry (ENB; EPD)
Trading the Brent/WTI Spread
Schork: "Demise of Brent/WTI premium might be premature" (EPD; ENB)
Schork Was Right (and a little lucky)--"Brent-WTI Surges To 2-Month Highs"
"Brent - WTI Spread Falls to Six Month Lows"
"Brent-WTI Spread Drops to a 52-Week Low"
Brent-WTI Spread Drops to Another 52-week Low
Memories
Like the corners of my mind
Misty water-colored (with a slight oily sheen) memories
Of the way we were...
Tank farms Cushing Oklahoma
