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Deutsche Bank: Pipelines explain WTI discount to Brent

02/28/2011
Marilyn RadlerSenior Editor-EconomicsIncreased pipeline capacity to bring crude oil to Cushing, Okla., has resulted in more oil flowing into PADD 2 than the refinery system there can handle, and therefore the landlocked crude is trading at a persistently wide discount to comparable global crudes, according to a research note released this month by Deutsche Bank Securities Inc.The current Brent-West Texas Intermediate spread is about $15/bbl. And although the spread corrects over the life of the futures curve, the price of WTI crude has moved structurally to a discount to Brent crude in a reversal of the historic premium that WTI has enjoyed, Deutsche Bank analysts Paul Sankey, David T. Cl...
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