Brent-WTI Spread Hits New All Time Record, May Double If Citi's Ed Morse Is Right

Tyler Durden's picture

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coppertop's picture

The refiners will be singing "jimmy Crack corn and I don't care..."

coppertop's picture

you just described your head

Sudden Debt's picture

The insults! They hurt so much!

 

Mr Lennon Hendrix's picture

Production peaked in 2005.  It has formed a plateau since then, and now, it appears production is falling.  The peak is in.

JW n FL's picture

http://www.youtube.com/watch?v=wYuLjGQQ-jg

 

Peak Lite Sweet Crude.. Peak Affordable Oil.. Peak Oil that you can afford to burn!

RetiredSilverBug's picture

Assuming small size of the commodity market, small stock and neverending demand in case of panic, I'd say we are set for a huge volatility in the next few years.

SheepDog-One's picture

Brent and WTI...the size correlation is like comparing an elephant to a shrew.

coppertop's picture

What is shrew sheepdog one?

coppertop's picture

why not post a picture mr entitlement?

Cognitive Dissonance's picture

Your avatar is an excellent example of one.

Cognitive Dissonance's picture

Nope.

It's definitely a Southern Short-tailed Shrew. No doubt about it.

Rodent Freikorps's picture

I've know a few split-tailed shrews. Don't get me started.

You know, pound for pound voles are the most vicious animal on earth.

Cognitive Dissonance's picture

Are you suggesting we stuff coppertop and some voles in a canvas bag, seal it and then throw it in the water?

Because I'm not.

Rodent Freikorps's picture

I would never be cruel to a vole. Just insert them and let them eat their way out.

knukles's picture

I dunno Rodent, my wife ranks right up there, too.

Rodent Freikorps's picture

Not likely.

Manatees are pretty inoffensive creatures.

knukles's picture

So can't be that now, can it.  Process of elimination.  Mamatees are cute, too.

Rodent Freikorps's picture

We need to protect them.

They do seem to be slow, stupid and way too likely to commit suicide by watercraft.

DoChenRollingBearing's picture

SheepDog, moments ago I was whining (in another thread) about the strange movements in gold & silver. ¨Malikai¨ told me to look at the crudes.

Yow!  $22 spread and growing!

Manipulation, bitchez!

SheepDog-One's picture

100% manipulated markets, while we try to guess which side to get in on to beat the millisecond traders.
Better off in Vegas betting on black or red! At least there scantilly clad waitresses bring free drinks, and plates of peas....or something.

Cognitive Dissonance's picture

It's all relative to the growing insanity. A $10 spread and an insanity level of '50' is equal to a $20 spread and an insanity level of '100'.

Time to pull the covers over your head when the insanity level hits "Mad Max".

Cognitive Dissonance's picture

I'm glad someone around here knows what he's doing because I sure as hell don't.

However, now I understand why my grandfather always told me to mind my Peas & Q's. :)

http://en.wikipedia.org/wiki/Mind_your_Ps_and_Qs

coppertop's picture

I'm glad someone around here knows what he's doing because I sure as hell don't.

 

Personal mythbuster. kind yet gentle 

DoChenRollingBearing's picture

Cog Dis, you might be interested to know that everyone here in Peru openly knows that .gov lies, that the banks are weak & crooked and that YES, the cops will shoot.

I will have to ask to see if the term ¨cognitive dissonance¨ even exists down here...

Cognitive Dissonance's picture

It seems we Americans are first in everything except in recognizing our own slavery.

Hopefully we will soon be first in that category as well.

/sarcasm -- Everyone knows Americans are not first in anything any longer. Except debt. Go USA.

coppertop's picture

So it's true that all drones don't fly.

Expat's picture

WTI trades about 900k lots on CME plus another 350k on ICE.

Brent is trading over a million lots a day.

Looks more like an elephant and another elephant. 

SheepDog-One's picture

I dont care about how much theyre HFT traded, whats the size of the oil?

CrashisOptimistic's picture

Trades are not relevant.

What matters is how much of each blend comes out of the ground.

ToNYC's picture

 

Brent is the real stuff,  useful and self-consuming, being a world currency, ready to deliver by signing off on the floating load.

knukles's picture

Is this really so complex that everybody is trying to Da Vinci Code it to death?  Or maybe just trying to generate some extra pocket change commissions?  Or talking book?

I mean, like uh, got all that oil form Canada coming into Cushing which is the delivery point (and thus price reference) for WTI.  Got a lot of folks trying to get the pipeline(s) closed between the tar sands and Cushing for  "environmental concerns" and even attempting to apply such pressure through the State Department.  (Yes, read that again.....)

Du-uh..... 

SoNH80's picture

I have heard from reliable sources that Cushing, OK - related shipping bottlenecks feed into the WTI-Brent spread.  It is getting to be p-r-e-t-t-y wide, though.....

knukles's picture

Absolutely....
There's a sense of fungibility if you will.  But simple s/d imbalances relative to historical norms are the key.  Historical norms.  WTI/Brent used to be for years a fairly constant relationship, before the Canadian deluge... 
Along with spillover, freight, capacity, sulphur, weight, etc., all feed in.
It is what it is.  Too much in one place relative to too little in another when viewed from an historical perspective.

SoNH80's picture

Yes.  There's a lot of garbage oil floating around N. America.... Venezuela too.... the Eastern Hemisphere produces the "toot sweet" stuff that everybody wants.... lo-sulfur corn syrup crude (Libya, lol)

FlyPaper's picture

You can burn garbage to make electricity.  Go TARSANDS!  

CrashisOptimistic's picture

There is also evidence that Brent is not being "cut".  WTI is being created by blending heavy dirty Canadian crude with NGL.  The result complies with API WTI definitoin but has less energy density.  Less valuable to refiners.

malikai's picture

I heard it costs $8 to load and ship WTI to LOOP by rail. If true, we have a risk-free $14 on that arb. I'm not sure what the Sept contract is going for, but if I was a rail guy, I'd be backing the fuckin train up.

Flakmeister's picture

$8 is a tad high.... the fact that it is not being arbed away tells me that what passes as WTI is not what the guy with the tanker at LOOP wants...