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Transportation constraints and export costs widen the Brent-WTI crude oil price spread

U.S. Energy Information Administration --------- In its November Short-Term Energy Outlook (STEO), EIA forecasts the price difference between West Texas Intermediate (WTI) crude oil priced at Cushing, Oklahoma, and Brent, the global crude oil price benchmark, to remain at $6 per barrel (b) through the first quarter of 2018 before narrowing to $4/b during the second half of 2018. WTI averaged $2/b lower than Brent through the first eight months of 2017 and averaged $6/b lower than Brent in September and October. The forecast Brent-WTI price spread in the November STEO is about $1/b wider than was forecast in last month’s STEO. The wider forecast spread reflects continuing price developments that have emerged over the past two months that likely resulted from transportation constraints in moving domestically produced crude oil from Cushing, Oklahoma, and from the Permian basin in Texas to the U.S. Gulf Coast. Although many other factors can affect WTI, Brent, or both crude oil prices at any given time, near-term changes in the Brent-WTI price spread will generally be derived from either changes in pipeline capacity or U.S. crude oil production. To learn more click on the picture below to read the article.

Transportation constraints and export costs widen the Brent-WTI crude oil price spread - Read More from EIA

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