Brent and LLS Prices Off due to Increase in Crude Inventories
August 29, 2012
Gulf Coast crude differentials dropped this week due to a surprise bump in crude inventories. The price of WTI is down slightly from last week, closing at $96 on August 28th. The prices of Brent and Louisiana Light Sweet have dropped $3, to $17 and $15 over WTI respectively. While prices in the Gulf Coast are off, West Coast prices are up slightly from last week. Bakken remains in line with WTI. The discount between Western Canadian Select and WTI has widened once again to $15 under, losing $4 since last week.
Falling Brent and LLS prices seem to have more to do with increased supply than the effect of Hurricane Isaac. Last week crude oil supply increased by 3.8 million barrels to 364.5 million barrles. Analysts predicted supplies to drop by two million barrels. While there has been little reported damage to the Gulf Coast crude oil production and refineries, which is excellent news, that fact may also be contributing to lower prices.
Categories: Wisdom from the Downstream Wizard