The Brent-WTI Spread is Mysteriously High

The two most widely traded oil benchmarks are West Texas Intermediate and Brent Crude. WTI is the benchmark for North American crude oil while Brent is the benchmark for Europe and the Middle East. The two grades are very close in quality, and historically have traded at very similar prices.

However, the spread between WTI and Brent started widening in 2017, and by early this year traders were largely united in suggesting that we’d reached a peak and it was time to become bearish on Brent. They were wrong:

The Brent-WTI spread did indeed start to narrow in March, but only for a short while. In May the spread took off like a rocket and currently stands at nearly 22 percent. This is a historical high aside from the period following the Arab Spring, when fears about Arab oil supply drove Brent prices well above WTI. Today, though, there’s nothing like the Arab Spring to explain what’s happening. There have been some vague notions floating around that Iran might try to close the Hormuz Strait, but nothing that seems very serious. And WTI inventories are up a bit, but not by enough to really explain anything.

So what’s going on? And does it mean anything serious?

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Minority rule, corruption, disinformation, attacks on those who dare tell the truth: There is a direct line from what's happening in Russia and Ukraine to what's happening here at home. And that's what MoJo's Monika Bauerlein writes about in "Their Fight Is Our Fight" to unpack the information war we find ourselves in and share a few examples to show why the power of independent, reader-supported journalism is such a threat to authoritarians.

Corrupt leaders the world over can (and will) try to shut down the truth, but when the truth has millions of people on its side, you can't keep it down for good. And there's no more powerful or urgent argument for your support of Mother Jones' journalism right now than that. We need to raise about $450,000 to hit our online fundraising budget in these next few months, so please read more from Monika and pitch in if you can.

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