Publications: Notes at the Margin

The Brent/Cushing Spread: It's Inventories, Stupid (November 20, 2017)


WTI delivered in Cushing continues to trade at a very large discount to WTI delivered in Houston and to Brent. The difference is explained by inventory levels. Crude oil stocks have declined in Europe and in Houston but remain high in Cushing. As a consequence, Europe and Houston are in significant backwardation, and Cushing is not. Thus, the price spread.


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