Who would have thought that when the spread between Brent and WTI crude topped out at $27.88 in mid-October, that we would be back down to levels from January in less than two months. As shown in the chart below (click to enlarge), the spread between Brent and WTI crude oil has completely collapsed in the last six to eight weeks and is now back down to levels last seen in March.
Within the energy sector, this has been the one bright spot for consumers. Given that gasoline prices have been more closely correlated to prices of Brent crude, consumers have seen little impact from the rising price of WTI. Now imagine what would happen if the price of both benchmark crude prices began to fall?