Diverging U.S. and global crude oil market fundamentals cause WTI and Brent prices to converge (8/6/2014)

Market fundamentals influencing U.S. and global oil markets have diverged this summer. Record-high seasonal refinery runs and low inventories in the United States have put upward pressure on prices of U.S. domestic crudes West Texas Intermediate (WTI) and Light Louisiana Sweet (LLS), while low demand in Europe and Asia and unplaced West African crude oil cargoes have depressed North Sea Brent prices. As a result, the Brent-WTI spread has narrowed, with WTI prices briefly reaching a premium to Brent prices for the first time since August 2010. While WTI prices quickly returned to a discount to Brent, the Brent-WTI spread remains relatively narrow, with the July spread averaging $3.92/barrel, the lowest level this year and almost 50% below the 2014 average. ...