WTI-Brent Spread

This is a dated article, posted about a month ago, at Market Realist, but it has some good data points regarding the WTI-Brent spread. In addition, it has some great graphics.

• A huge surge in oil production in North Dakota has caused differentials between Bakken crude (priced at Clearbrook, MN) and WTI Midland crude to fluctuate and blow out at several points over the past several years as takeaway structure had lagged production.
• Recently, the differential between Bakken and WTI crudes had stabilized and closed in as newly finished infrastructure has come online. Bakken differentials to WTI had generally remained below $2.00/barrel since March, signaling sufficient takeaway capacity from the basin. Additionally, usage of rail rather than pipelines into Cushing have allowed Bakken crude to reach refining markets without having to pass through a crowded hub.
• More stable Bakken based crude prices and a lesser risk of the differential blowing out to ~$20+/barrel again is a positive for producers operating in the region.
• From May 30th to June 10th, the spread changed by $9 per barrel, in a positive catalyst for producers with Bakken assets, such as Continental Resources (CLR) and Whiting Petroleum (WLL).