WTI has typically traded at a discount to Brent, although the differential widens and narrows depending on specific dynamics affecting the two benchmarks. Back in 2012, when the shale bonanza really began to explode, the midstream sector was ill-prepared for such a dramatic ramp up. The result was a bottleneck that forced WTI to trade at a discount in excess of $20 per barrel for a short period of time. New pipelines resolved the backlog and the discount narrowed in the ensuing years. In 2018, however, surging production in the Permian has resulted in yet another midstream bottleneck. As a result, the WTI discount has bounced around between $3 and $8 per barrel relative to Brent. In September, the differential jumped to $9. (Click to enlarge) In fact, the two benchmarks may very well continue to diverge in the months ahead as they experience different market pressures. U.S. shale […]