OP: The spread between Brent and WTI has aligned with transatlantic freight costs

Oilprice.com reports:

The cost of transporting U.S. crude from the Gulf Coast to Europe has been increasingly determining the discount at which the U.S. benchmark WTI trades relative to the North Sea crude benchmark Brent, according to estimates by Argus.

So far in September, the cost of shipping a U.S. crude cargo from the Gulf Coast to Europe has been nearly the same as the Brent-WTI spread.

This month, a cargo of 700,000 barrels of WTI crude has cost $2.33 per barrel on average to transport from the U.S. Gulf Coast to Europe. This has been only a penny away from the average premium at which the second-month Brent futures contract on the ICE has traded over the NYMEX front-month WTI futures contract, Argus has estimated.  

The Brent benchmark has seen downward pressure since WTI crude was included on June 1 in the Brent crude basket that underlies the world’s most traded benchmark contract.

WTI Midland became the first non-European grade included in the basket, highlighting the change that the U.S. shale revolution brought about for the global oil market…

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