The WTI Brent spread

The WTI-Brent spread has been widening in recent weeks, with the US benchmark last trading at a discount of USD 1.26/b to the international grade. This is sharply down from a few days where the spread inversed in January and the trend appears to be reversing the general tightening trajectory we witnessed for most of 2015. Is this reversal significant and is the market in store for further widening? Below we discuss several dynamics we feel will affect the spread over the next year.

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