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Analysts at TD Securities note that the divergence theme across global energy markets continues to grow as the Brent-WTI spread widened to levels not seen since last June.

Key Quotes

“We suspect that structural constraints will continue to add pressure to the spread, which should continue to expand the widening theme. Brent’s sharp backwardation contrasts firmly with WTI’s contango, which lends further support to a Brent-WTI widener trade as carry works in favor of both legs.”

“In the near-term, however, we note that outsized refinery outages are likely to subside given the high incentive prices held by refineries. As for the recent crash in crude, we think that prices will stabilize from here as technicals, supply risks and OPEC discipline point to stability.”