NYMEX crude financial contracts for the West Texas Intermediate (WTI) exceeded the Intercontinental Exchange’s (ICE) Brent Crude for the first time in three years on Friday by 3 cents. At the time of writing, WTI was reasserting its benchmark dominance as the spread between it and Brent disappeared.

Limited pipeline access has been the main reason why WTI traditionally has traded weaker than its European counterpart. According to Bloomberg, the gap was as much as $23.44 a barrel back in February. However, new and reversed pipeline access, along with improved railway transportation, is said to have brought about the recent gains.

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Figure 1: WTI vs Brent Prompt Futures Jun-Jul 2013. Graph created by ZEMA.

Last week the U.S. Energy Information Administration (EIA) said: “Crude runs at U.S. refineries have increased steadily since early March to reach some of the highest levels on record. At 16.1 million barrels per day (bbl/d) for the week ending July 5, U.S. crude oil runs were the highest for any week since 2007.”

The aforementioned opening up of the pipeline capacity from Cushing to the Gold Coast and the increase in domestic crude reaching the Gulf Coast by rail has changed the market perception that there is an oil glut in Cushing.

If you’re interested in monitoring the on-going changes in crude prices, check out our crude market snapshots that monitor the changing gap between WTI and Brent forward curves.

Graph created by Karen Hung and Maninder Manhas.