18 Feb 2015
WTI-Brent gap could widen further – TDS
FXStreet (Edinburgh) - Analyst at TD Securities Michael Loewen expects a wider WTI-Brent spread amidst declining prices.
Key Quotes
“US crude oil inventories have increased by an average of 5.4 MMbbld per week year-to-date reaching 417.9 MMbbl as of last week’s data”.
“This tremendous growth is counter to expected seasonality, which typically sees inventories decline as a result of refineries producing gasoline and other refined products ahead of summer demand”.
“Unsurprisingly, crude oil storage utilization (non-SPR) has increased by an average of 136 bps each week year-to-date to 80.2%”.
“While we expect these increases to moderate in February, planned refinery maintenance for March and April will see storage creep much higher and potentially impact availability mid-Q2/15”.
“With no where to put crude oil volumes, WTI-Brent should widen to dis-incentivize net imports as support for local price per barrel collapses”.
Key Quotes
“US crude oil inventories have increased by an average of 5.4 MMbbld per week year-to-date reaching 417.9 MMbbl as of last week’s data”.
“This tremendous growth is counter to expected seasonality, which typically sees inventories decline as a result of refineries producing gasoline and other refined products ahead of summer demand”.
“Unsurprisingly, crude oil storage utilization (non-SPR) has increased by an average of 136 bps each week year-to-date to 80.2%”.
“While we expect these increases to moderate in February, planned refinery maintenance for March and April will see storage creep much higher and potentially impact availability mid-Q2/15”.
“With no where to put crude oil volumes, WTI-Brent should widen to dis-incentivize net imports as support for local price per barrel collapses”.