Brent/WTI spread narrows to fresh yearly lows, August touches $2/bl

London (Quantum Commodity Intelligence) – The closely watched Brent/WTI spread narrowed sharply during the first half of June as benchmark WTI futures outpaced North Sea Brent on expectations that US demand growth will outpace Europe.

The spread for August was trading at around $2.15/b in London afternoon trading Monday (1500 GMT), having briefly touched $2.00/b -- the narrowest spread since November of 2020, according to exchange data.

"Anticipation of a tighter US crude market over the coming months (as refinery throughputs rise faster than US crude production) has driven most of the narrowing. If the US crude market tightens further, crude exports could fall," noted the International Energy Agency in its monthly report published Friday.

The spread has nearly halved in under two months with Brent/WTI at $4/b as recently as April 23, and trading at around $2.70/b in early June.

A narrow Brent/WTI spread typically makes US crude grades more expensive compared to Brent-linked grades.