In the decade before the Fed announced QE2, the average Brent-WTI spread was around 90c. In the 14 months following the inception of that 'healing' easing, the spread exploded to around $28 by October 2011, bounced back up to around $25 in late 2012 and has been sliding since the start of the year driven by WTI's inexorable rise (amid Brent's relative stability). It seems no matter how hard they try to control the exuberant thrusting outgrowths of a liquidity spigot held wide-open, it eventually overwhelms and between Egypt, infrastructure, and RINs [2], the price of gas at the pump is about to cross its all time high for the time of year as WTI drops to its closest in price to Brent since QE2 was 'announced' at Jackson Hole. Brent-WTI is now at 35c as WTI tops $108.30 (highest in 17 months).
Brent-WTI collapses intraday...
[3]
back to pre-Jackson Hole and below its long-run average...
[4]
of course this won't affect gas prices at all...
[5]
Charts: Bloomberg