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14 Jan 2015
Spread between WTI and Brent continues to narrow – DB
FXStreet (Barcelona) - Analysts at Deutsche Bank note that with WTI and Brent falling 55%-58% off their highs the spread between their prices has continued to narrow, with Brent trading below WTI yesterday for a brief period.
Key Quotes
“One of the other biggest sectors, namely Energy continues to grab the headlines with energy stocks (-0.73%) dragging the S&P 500 (-0.26%) lower yesterday for its third consecutive day. Credit markets in the US closed softer also with IG23 half a basis point wider and US HY energy credits widening +8bps in cash spread terms.”
“It was in fact a volatile day yesterday with equities initially opening some +1.4% firmer, helped in part by a decent European session. The S&P 500 later succumbed to the declines in oil, hitting an intraday low of -1.0% before paring back some of those losses into the close.”
“There were similar volatile moves in oil markets over the course of the day. After both markets traded as much as 3-5% lower for the majority of the session, WTI (-0.39%) and Brent (-1.77%) recovered into the close at $45.89/bbl and $46.59/bbl respectively.”
“Yesterdays moves mean WTI and Brent are 12.5% and 18.7% lower year-to-date already and some 55%-58% off their 2014 highs. The spread between the two markets has continued to narrow recently and yesterday Brent briefly traded below WTI.”
“Yesterday’s moves were not helped by news out of the UAE energy minister who was quoted on Reuters as saying that ‘the strategy will not change’ with regards to any cuts in production out of OPEC.”
Key Quotes
“One of the other biggest sectors, namely Energy continues to grab the headlines with energy stocks (-0.73%) dragging the S&P 500 (-0.26%) lower yesterday for its third consecutive day. Credit markets in the US closed softer also with IG23 half a basis point wider and US HY energy credits widening +8bps in cash spread terms.”
“It was in fact a volatile day yesterday with equities initially opening some +1.4% firmer, helped in part by a decent European session. The S&P 500 later succumbed to the declines in oil, hitting an intraday low of -1.0% before paring back some of those losses into the close.”
“There were similar volatile moves in oil markets over the course of the day. After both markets traded as much as 3-5% lower for the majority of the session, WTI (-0.39%) and Brent (-1.77%) recovered into the close at $45.89/bbl and $46.59/bbl respectively.”
“Yesterdays moves mean WTI and Brent are 12.5% and 18.7% lower year-to-date already and some 55%-58% off their 2014 highs. The spread between the two markets has continued to narrow recently and yesterday Brent briefly traded below WTI.”
“Yesterday’s moves were not helped by news out of the UAE energy minister who was quoted on Reuters as saying that ‘the strategy will not change’ with regards to any cuts in production out of OPEC.”