Goldman Sachs took a stab at solving an oil market mystery.
For months, the discount of West Texas Intermediate crude at Cushing, the U.S. benchmark, to North Sea Brent, has been lingering around $15 a barrel. In recent days, it has suddenly taken another gap wider to a record of $21.80 a barrel on Monday. (It narrowed a bit on Tuesday to $20.57.)
But for once, the huge gap may not be the Cushing, where the tanks are have been brimming with oil for months, depressing WTI prices and keeping the spread wide.
Inventories at Cushing have actually been falling a bit lately, which should mean WTI prices are moving up against Brent, narrowing that spread.
The culprit, Goldman analysts, say is further south – in Louisiana, where light sweet crude oil prices are trading weirdly in relation to their Brent counterparts.
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if the chinese bid up the price of brent, why should they care, they will settle in worthless us dollars, they have so many of them. so take something that you would wipe your dukey with, to buy the most valuable resource.the hell with the spread after that.that will just increase the price at the pump anyway.. so who wins?