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Oil Prices Keep Falling, But a Strange Gap Persists

businessweek.com -- Oil prices are down more than 20 percent since mid-March. Yet that hasn’t erased a strange anomaly in the market: the gap between two essentially identical types of oil. North American light, sweet crude, also known as West Texas Intermediate, trades just below $84 while its international equivalent, known as Brent, is priced at $97.

Why would two similar products sell for such different prices? The problem is getting hold of WTI and connecting supply with demand.

The discrepancy has lasted a lot longer than most people thought. Although they’ve traded within a dollar of each other for the bulk of the past 20 years, starting in August 2010, WTI began trading below Brent by about two to three dollars. By February 2011, the spread widened to $20 as domestic production ramped up and tu

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Submitted Jun 18, 2012 By: teafortwo

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goldrose1 Champion Author Cleveland Posts:10,956 Points:1,927,755 Joined:Feb 2005	Message Posted: Jun 21, 2012 8:30:13 PM Ignore goldrose1 Report Abuse Interesting.
TXryder Champion Author Texas Posts:2,725 Points:435,655 Joined:Jan 2012	Message Posted: Jun 19, 2012 5:08:39 AM Ignore TXryder Report Abuse Of course there is difference. WTI - west TX, Brent crude - London. Brent is traded on the intercontinental commodities exchange (ICE) Thanks to the gov corruption... Republican commodities deregulation evolved back at the turn of the century, the result... ICE was created by the giant corporate manipulators of commodities years back such as including Mobil, Exxon, Conoco, Phillips, BP North America, Enron, Goldman Sachs, J.P. Morgan, Morgan Stanley, Chase Manhattan Bank, Citigroup and the American Petroleum Institute. Need I say more.How ICE evolved out of deregulation [Edited by: TXryder at 6/19/2012 8:12:47 AM EST]
Amtrgas Champion Author Oakland Posts:2,678 Points:1,623,445 Joined:Dec 2007	Message Posted: Jun 18, 2012 11:39:49 PM Ignore Amtrgas Report Abuse Just as long as the price of gasoline stays low. Who gives a SH*T
Dodge_Me Champion Author Atlanta Posts:2,214 Points:557,730 Joined:Mar 2006	Message Posted: Jun 18, 2012 9:16:06 PM Ignore Dodge_Me Report Abuse Hmm?
lasriog Sophomore Author Texas Posts:144 Points:337,480 Joined:Jan 2012	Message Posted: Jun 18, 2012 9:16:04 PM Ignore lasriog Report Abuse drz614 was right aviator Gas was around $1.59 in December 2008 And it was under $3.00 during the early part of 2008 Price did not jump until May and was back down by November Try to know what you are talking about before you call other people out
cmsense Champion Author Columbus Posts:1,358 Points:165,345 Joined:Jan 2012	Message Posted: Jun 18, 2012 9:15:07 PM Ignore cmsense Report Abuse Prices are what they are, better off concentrating on how you can combine your intelligence,creativity, and conservation strategies to spend the least about of your income on energy usage.
jrsva Champion Author Virginia Posts:9,866 Points:1,615,135 Joined:Jan 2006	Message Posted: Jun 18, 2012 9:04:59 PM Ignore jrsva Report Abuse “the gap has always been big...at $60 a barrel gas was at $2 a gallon” Not the gap being discussed here. Try reading the article before commenting.
Aviator_Rob Champion Author New York Posts:3,810 Points:416,040 Joined:Mar 2012	Message Posted: Jun 18, 2012 9:04:40 PM Ignore Aviator_Rob Report Abuse drz614, the price you quoted was in 2009. If you want 2008 when George Dubya was in office, you'd have to aim higher, like $4.00/gal.
Aviator_Rob Champion Author New York Posts:3,810 Points:416,040 Joined:Mar 2012	Message Posted: Jun 18, 2012 9:02:31 PM Ignore Aviator_Rob Report Abuse Seriously kc58veteran, it's the height of laziness to just copy and paste the same tired comments all over the forums. Save that for the Fox News website.
Mustache_33 All-Star Author Toronto Posts:900 Points:181,455 Joined:May 2012	Message Posted: Jun 18, 2012 9:01:19 PM Ignore Mustache_33 Report Abuse noted
gus8441 Champion Author Baltimore Posts:2,129 Points:445,650 Joined:Feb 2012	Message Posted: Jun 18, 2012 9:01:14 PM Ignore gus8441 Report Abuse shocker
mplato Champion Author Columbia Posts:8,264 Points:1,818,195 Joined:Jun 2004	Message Posted: Jun 18, 2012 8:48:13 PM Ignore mplato Report Abuse the gap has always been big...at $60 a barrel gas was at $2 a gallon
LQQKGAS Champion Author Phoenix Posts:2,673 Points:1,197,845 Joined:Oct 2009	Message Posted: Jun 18, 2012 8:47:29 PM Ignore LQQKGAS Report Abuse Strange?
WIPACKERFAN Champion Author Chicago Posts:8,814 Points:1,845,400 Joined:Aug 2005	Message Posted: Jun 18, 2012 8:46:08 PM Ignore WIPACKERFAN Report Abuse OK
carloco75 Champion Author Richmond Posts:3,721 Points:602,965 Joined:Oct 2010	Message Posted: Jun 18, 2012 8:45:32 PM Ignore carloco75 Report Abuse Hmm...whata surprise...
JagXKR Champion Author British Columbia Posts:3,169 Points:1,093,480 Joined:Dec 2009	Message Posted: Jun 18, 2012 8:45:09 PM Ignore JagXKR Report Abuse $70 per barrel oil would be great if gas prices followed suit but that has not happened so far.
flyfast Champion Author Kansas City Posts:9,263 Points:1,827,985 Joined:Jan 2008	Message Posted: Jun 18, 2012 8:42:00 PM Ignore flyfast Report Abuse GAS UP
IUVidiot Champion Author Indiana Posts:3,600 Points:711,385 Joined:Jun 2011	Message Posted: Jun 18, 2012 8:38:40 PM Ignore IUVidiot Report Abuse ok
charladan All-Star Author Virginia Posts:564 Points:451,290 Joined:Jun 2011	Message Posted: Jun 18, 2012 8:38:03 PM Ignore charladan Report Abuse interesting
js0743 All-Star Author Georgia Posts:981 Points:460,130 Joined:Nov 2011	Message Posted: Jun 18, 2012 8:36:22 PM Ignore js0743 Report Abuse No surprise here.
davenles Champion Author Texas Posts:3,211 Points:720,835 Joined:May 2011	Message Posted: Jun 18, 2012 8:35:45 PM Ignore davenles Report Abuse Long story short. Gas prices are not driven by oil prices.
firefly09 Champion Author San Diego Posts:2,502 Points:717,675 Joined:Mar 2009	Message Posted: Jun 18, 2012 8:33:51 PM Ignore firefly09 Report Abuse HMMMMMMMM.
wayoung56 Champion Author Alabama Posts:2,815 Points:821,260 Joined:Oct 2006	Message Posted: Jun 18, 2012 8:30:41 PM Ignore wayoung56 Report Abuse Interesting article...
NedW Champion Author Indianapolis Posts:5,625 Points:1,144,345 Joined:Mar 2008	Message Posted: Jun 18, 2012 8:28:10 PM Ignore NedW Report Abuse N4PIP, Bush was balking at exploration and recovery, too. I'm fully aware. Criticism of the current admin doesn't necessarily reflect on any other.
tippybuddy Champion Author Ontario Posts:1,523 Points:207,740 Joined:Feb 2011	Message Posted: Jun 18, 2012 8:25:02 PM Ignore tippybuddy Report Abuse keep dropping a lot more I'd love that
blazerbob91 Champion Author Milwaukee Posts:6,155 Points:1,885,620 Joined:Aug 2005	Message Posted: Jun 18, 2012 8:23:47 PM Ignore blazerbob91 Report Abuse Sounds like manipulation.
grn7stars Rookie Author Washington Posts:36 Points:168,125 Joined:Jun 2012	Message Posted: Jun 18, 2012 8:22:44 PM Ignore grn7stars Report Abuse ok
NHLiveFree Champion Author New Hampshire Posts:11,113 Points:1,625,315 Joined:Jun 2008	Message Posted: Jun 18, 2012 8:21:51 PM Ignore NHLiveFree Report Abuse Such a dilemma for Big Oil. I'm sure Exxon will manage to pump the WTI price back up to that of Brent one way or another. Of course the API sings the praises of WTI at every opportunity.
drz614 Champion Author Harrisburg Posts:2,314 Points:600,545 Joined:Aug 2011	Message Posted: Jun 18, 2012 8:20:31 PM Ignore drz614 Report Abuse lol, what were gas prices in 2k8? 1.59. omg. thanks for the change. lol
abcdMA Champion Author Worcester Posts:7,937 Points:1,577,905 Joined:Nov 2008	Message Posted: Jun 18, 2012 8:18:10 PM Ignore abcdMA Report Abuse dropping prices, the sign of a failing economy
cutter1330 Champion Author Oklahoma Posts:8,045 Points:1,696,065 Joined:Jul 2005	Message Posted: Jun 18, 2012 8:17:28 PM Ignore cutter1330 Report Abuse Why then is pump price headed up here?
dky63 Veteran Author Illinois Posts:417 Points:166,965 Joined:Apr 2011	Message Posted: Jun 18, 2012 8:16:15 PM Ignore dky63 Report Abuse record profits for big oil
listerone Champion Author Boston Posts:3,390 Points:880,715 Joined:Aug 2008	Message Posted: Jun 18, 2012 8:15:18 PM Ignore listerone Report Abuse Boycott Chinese made goods and oil prices will drop overnight.
N4PIP All-Star Author Miami Posts:915 Points:421,380 Joined:Jan 2012	Message Posted: Jun 18, 2012 8:14:30 PM Ignore N4PIP Report Abuse @NedW I hope you know that when George W. Bush was president gas prices were as high as they are now. Prices steadily increased from 2000 to 2008. Then guess what? Election year struck and prices dropped temporarily. When those who had influence on gas prices lost the election, they decided to make Americans suffer again. Please don't rewrite history with misleading numbers. The law of supply and demand has not been affecting prices in a very long time. It is market manipulation instead.
rf6480 Champion Author Miami Posts:1,538 Points:549,510 Joined:Mar 2011	Message Posted: Jun 18, 2012 8:12:32 PM Ignore rf6480 Report Abuse oil is dropping, thank goodness gas is taking too long to catch up.
JoeKR Champion Author New Jersey Posts:9,483 Points:1,746,420 Joined:Feb 2006	Message Posted: Jun 18, 2012 8:12:08 PM Ignore JoeKR Report Abuse Supply/Demand? Isn't the information contained here incentive enough for the oil powers tp build more refineries in better located locations? The refineries in the Gulf serve fundamentally to trans ship the product overseas serving to drive up prices and not helping the drill here, drill now crowd.
NedW Champion Author Indianapolis Posts:5,625 Points:1,144,345 Joined:Mar 2008	Message Posted: Jun 18, 2012 8:07:34 PM Ignore NedW Report Abuse On Jan. 16, 2009, oil was $36.51/bbl. and $1.729/g at the pump in this area. Obama promised, "under my plan, energy costs are necessarily going to have to skyrocket." This article and the plethora of others like it are like getting pi$$ed on and being told it's only raining. "If you tell a lie long enough and often enough, the people will believe it." -Adolph Hitler
habhday Rookie Author Tacoma Posts:34 Points:7,080 Joined:Jun 2012	Message Posted: Jun 18, 2012 8:06:53 PM Ignore habhday Report Abuse not surprising since folks I know are cutting down on driving once gas around here hit $4.35 a gal.
gmcgas Champion Author Atlanta Posts:5,963 Points:1,716,120 Joined:Mar 2004	Message Posted: Jun 18, 2012 8:05:22 PM Ignore gmcgas Report Abuse a game, we are losers at the pump.
waterwerks Veteran Author New Mexico Posts:349 Points:185,930 Joined:Mar 2012	Message Posted: Jun 18, 2012 8:04:26 PM Ignore waterwerks Report Abuse I think I'll go with the fat pockets theory...not going to change with more pipes...probably going to get worse.
carinthuist Champion Author San Francisco Posts:2,255 Points:332,100 Joined:Mar 2012	Message Posted: Jun 18, 2012 8:04:07 PM Ignore carinthuist Report Abuse No prices falling on gas.
PoohMcGoo Champion Author Alabama Posts:3,077 Points:802,635 Joined:Dec 2010	Message Posted: Jun 18, 2012 8:03:33 PM Ignore PoohMcGoo Report Abuse The oil business is very unpredictable.
clermont40miles Champion Author Cincinnati Posts:10,588 Points:1,774,820 Joined:Apr 2008	Message Posted: Jun 18, 2012 8:01:48 PM Ignore clermont40miles Report Abuse The fleecing continues.
Is246 Champion Author Albuquerque Posts:1,019 Points:428,710 Joined:Apr 2011	Message Posted: Jun 18, 2012 7:59:19 PM Ignore Is246 Report Abuse Its a way to keep pump prices high.
SUSANCK Champion Author Chicago Posts:3,652 Points:710,405 Joined:Apr 2011	Message Posted: Jun 18, 2012 7:55:52 PM Ignore SUSANCK Report Abuse Normal.
itsjustme719 All-Star Author Hamilton Posts:612 Points:600,220 Joined:Dec 2010	Message Posted: Jun 18, 2012 7:55:01 PM Ignore itsjustme719 Report Abuse I guess that explains why gas prices haven't dropped much.
EmperorsFinest Champion Author Chicago Posts:1,564 Points:340,870 Joined:Jul 2011	Message Posted: Jun 18, 2012 7:53:00 PM Ignore EmperorsFinest Report Abuse Typical...
JENNYHK Champion Author Chicago Posts:3,651 Points:715,495 Joined:Apr 2011	Message Posted: Jun 18, 2012 7:52:23 PM Ignore JENNYHK Report Abuse Strange? Please!
RAKARWOWSKI Champion Author Chicago Posts:4,010 Points:822,975 Joined:Jan 2011	Message Posted: Jun 18, 2012 7:49:36 PM Ignore RAKARWOWSKI Report Abuse They are screwing us, what is new?
carman11 Champion Author North Carolina Posts:3,353 Points:694,650 Joined:Jun 2011	Message Posted: Jun 18, 2012 7:47:34 PM Ignore carman11 Report Abuse THE GAP COULD BE IN SOMEONES POCKET.