The glut in Cushing is contributing to the record price spread, which “is a sign that both benchmarks are becoming dislodged from reflecting true global supply and demand,” Commerzbank analyst Carsten Fritsch tells the WSJ.
Analysts say the increase in the spread is proof that new production of oil in places like North Dakota and Texas is coming online faster than Seaway can transport it away from the Cushing storage hub in Oklahoma to refineries on the Gulf Coast … This has suppressed the price of WTI crude just as tension over Iran’s nuclear program has lifted the price of Brent.
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