The only thing worse for drivers than rising crude oil prices here in the US is the rising spread between Brent and WTI crude oil. Since bottoming out late last year, the spread between the two benchmark prices of crude oil has risen by more than 140% and is now back above $20 per barrel.
(Click to enlarge)Click to enlargeThe reason the Brent-WTI spread is so important is because gasoline prices are more closely correlated to the price of Brent. The chart below compares the price of gasoline, Brent Crude, and WTI Crude since the start of 2011. While the price of Brent Crude and gasoline have tracked each other closely, the performance of WTI Crude has been much less correlated. Therefore, if you are hoping for some relief at the pump this Summer, it is not going to come unless something helps to break the relentless run in Brent Crude prices.