Divergence in Crude Oil Prices

Amy Magnotta, Brinker Capital

An interesting observation from 13D Research last week:

“U.S. gasoline prices appear to be more closely correlated with the global crude oil benchmark (Brent) than West Texas Intermediate (WTI). Consider the following: When WTI first crossed $92 per barrel in October 2007, the average gasoline price approximated $2.90 per gallon. Now, with WTI near the same $92 level as five years ago, the average gasoline price is 34% higher. Not surprisingly, Brent crude also gained 33% during that five-year span.”

The chart below shows how the prices of WTI and Brent crude oil have diverged since 2011:

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