The price of West Texas Intermediate (WTI) closed at a discount of $3.09 to Brent on June 19, 2015. The gap is the lowest in five months, when the spread narrowed to $2.76 at the closing of January 21.
WTI prices have greatly stabilized in recent months as production has plateaued. Rig counts fell by only two this week, according to Baker Hughes, raising hopes that the operating rig trough is either here or extremely close. WTI spot prices in May 2015 featured the shortest range since November 2013, and the range for June 2015 to date is $4.68, which would be the second most stable month since September 2014.
The week ended June 12, 2015 marked the seventh straight week of inventory decline as storage continues to slowly retreat from all-time highs. The lowest oil prices since 2008 have been a boon for downstream and refinery companies. The EIA reports global refineries and associated downstream companies accounted for more than 60% of all earnings in the latest quarter. The sector had never accounted for more than 30% in the previous 17 quarters.
WTI Discount to Brent
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