EIA forecasts narrowing Brent, WTI spread on reduced pipeline constraints
WASHINGTON - In its current Short Term Energy Outlook, the U.S. Energy Information Administration anticipates a narrower differential between Brent and WTI crude prices for the rest of the year and into 2020.
EIA expects West Texas Intermediate crude oil prices will average $5.50/bbl less than Brent prices during the fourth quarter of 2019 and in 2020, narrowing from the $6.60/bbl spread during July. The narrowing spread reflects EIA’s assumption that crude oil pipeline transportation constraints from the Permian basin to refineries and export terminals on the U.S. Gulf Coast will ease in the coming months. In the July STEO, EIA forecast the Brent-WTI spread to average $4.00/bbl in 2020. The updated differential forecast reflects EIA’s revised assumptions about the marginal cost of moving crude oil via pipeline from Cushing, Oklahoma, to the Gulf Coast.
