In oil markets, the spread between prices of West Texas Intermediate and Brent crude has contracted on news a pipeline sold by ConocoPhillips to Enbridge will be reversed.
Earlier this week, the WTI-Brent spread fell to its lowest levels since May, WSJ.com’s MarketBeat reported.
“Enbridge will reverse the flow of oil to bring crude from Oklahoma to the Gulf instead of the other way around. This will help to alleviate the glut that has built up at Cushing, and depressed the price of WTI crude oil,” Bespoke Investment Group notes.
The narrowing of the spread has allowed U.S. Oil Fund (NYSEArca: USO) to catch up with U.S. Brent Oil Fund (NYSEArca: BNO).
The chart below shows the price ratio of U.S. Oil Fund versus U.S. Brent Oil Fund.