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

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Mon, 07/11/2011 - 12:45 | 1444287 coppertop
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The refiners will be singing "jimmy Crack corn and I don't care..."

Mon, 07/11/2011 - 12:46 | 1444290 Sudden Debt
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Peak bullshit?

 

Mon, 07/11/2011 - 12:46 | 1444292 coppertop
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you just described your head

Mon, 07/11/2011 - 12:52 | 1444319 Sudden Debt
Sudden Debt's picture

The insults! They hurt so much!

 

Mon, 07/11/2011 - 13:19 | 1444435 Mr Lennon Hendrix
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Production peaked in 2005.  It has formed a plateau since then, and now, it appears production is falling.  The peak is in.

Mon, 07/11/2011 - 13:39 | 1444535 JW n FL
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http://www.youtube.com/watch?v=wYuLjGQQ-jg

 

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

Mon, 07/11/2011 - 12:46 | 1444291 RetiredSilverBug
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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.

Mon, 07/11/2011 - 12:47 | 1444298 SheepDog-One
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Brent and WTI...the size correlation is like comparing an elephant to a shrew.

Mon, 07/11/2011 - 12:49 | 1444301 coppertop
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A shrew? 

Mon, 07/11/2011 - 12:50 | 1444310 SheepDog-One
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Thats right, dumbass.

Mon, 07/11/2011 - 12:56 | 1444333 coppertop
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What is shrew sheepdog one?

Mon, 07/11/2011 - 13:00 | 1444351 SheepDog-One
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Damn!!

Mon, 07/11/2011 - 13:02 | 1444362 coppertop
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why not post a picture mr entitlement?

Mon, 07/11/2011 - 13:05 | 1444374 Cognitive Dissonance
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Your avatar is an excellent example of one.

Mon, 07/11/2011 - 13:08 | 1444382 coppertop
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my avatar is of a manatee

Mon, 07/11/2011 - 13:16 | 1444415 Cognitive Dissonance
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Nope.

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

Mon, 07/11/2011 - 13:20 | 1444441 Rodent Freikorps
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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.

Mon, 07/11/2011 - 13:24 | 1444459 Cognitive Dissonance
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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.

Mon, 07/11/2011 - 13:47 | 1444578 Rodent Freikorps
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I would never be cruel to a vole. Just insert them and let them eat their way out.

Mon, 07/11/2011 - 13:26 | 1444470 knukles
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I dunno Rodent, my wife ranks right up there, too.

Mon, 07/11/2011 - 13:18 | 1444432 Rodent Freikorps
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Not likely.

Manatees are pretty inoffensive creatures.

Mon, 07/11/2011 - 13:27 | 1444478 knukles
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So can't be that now, can it.  Process of elimination.  Mamatees are cute, too.

Mon, 07/11/2011 - 13:49 | 1444585 Rodent Freikorps
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We need to protect them.

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

Mon, 07/11/2011 - 13:14 | 1444401 Cognitive Dissonance
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Sever issue.

Mon, 07/11/2011 - 12:51 | 1444313 DoChenRollingBearing
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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!

Mon, 07/11/2011 - 12:53 | 1444325 SheepDog-One
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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.

Mon, 07/11/2011 - 12:54 | 1444326 Cognitive Dissonance
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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".

Mon, 07/11/2011 - 12:55 | 1444329 SheepDog-One
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I gots my canned peas, CD!

Mon, 07/11/2011 - 12:59 | 1444342 Cognitive Dissonance
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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

Mon, 07/11/2011 - 13:00 | 1444354 coppertop
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I'm glad someone around here knows what he's doing because I sure as hell don't.

 

Personal mythbuster. kind yet gentle 

Mon, 07/11/2011 - 13:12 | 1444398 DoChenRollingBearing
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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...

Mon, 07/11/2011 - 13:20 | 1444430 Cognitive Dissonance
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.

Mon, 07/11/2011 - 12:57 | 1444336 coppertop
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So it's true that all drones don't fly.

Mon, 07/11/2011 - 13:03 | 1444366 Expat
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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. 

Mon, 07/11/2011 - 13:06 | 1444377 SheepDog-One
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I dont care about how much theyre HFT traded, whats the size of the oil?

Mon, 07/11/2011 - 13:08 | 1444386 coppertop
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Tell us more about the shrew and the elephant

Mon, 07/11/2011 - 13:37 | 1444531 CrashisOptimistic
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Trades are not relevant.

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

Mon, 07/11/2011 - 13:07 | 1444380 ToNYC
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Brent is the real stuff,  useful and self-consuming, being a world currency, ready to deliver by signing off on the floating load.

Mon, 07/11/2011 - 12:50 | 1444300 knukles
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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..... 

Mon, 07/11/2011 - 12:59 | 1444350 SoNH80
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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.....

Mon, 07/11/2011 - 13:11 | 1444397 knukles
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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.

Mon, 07/11/2011 - 13:23 | 1444454 SoNH80
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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)

Mon, 07/11/2011 - 20:21 | 1446033 FlyPaper
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You can burn garbage to make electricity.  Go TARSANDS!  

Mon, 07/11/2011 - 20:42 | 1446088 SoNH80
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Yes, but for the time being, the U.S. EPA has other ideas......

http://www.epa.gov/airquality/powerplanttoxics/pdfs/overviewfactsheet.pdf

Mon, 07/11/2011 - 13:40 | 1444541 CrashisOptimistic
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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.

Mon, 07/11/2011 - 17:31 | 1445496 malikai
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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.

Mon, 07/11/2011 - 17:34 | 1445511 Flakmeister
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...

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