Monday, April 9, 2012  Brent-WTI spread update  Here is a quick
update on the Brent-WTI spread dynamics. As discussed earlier
the US crude inventory and the Iran uncertainties have been the
drivers of the spread. The Iran situation has not changed much
since, although nuclear talks are now a certainty. Iran has no
real choice but to agree to the talks.  As far as the US crude
inventories, the amount of crude oil in stock continues to rise,
now near the top of the 5-year range.  Source: EIA That has not
only stalled the rally in crude oil, but also widened out the
Brent-WTI spread to above $20/barrel.  Brent-WTI spread
(Bloomberg)  Again the reason for monitoring this spread closely
is that US gasoline prices correlate closer to Brent prices than
to WTI. The chart below shows the spread between US Gasoline
Futures and WTI Futures (the gasoline crack spread), which has
moved up with Brent-WTI spread. Put another way, the amount that
US refineries can charge for their product depends to a large
extent on the Bre