The WTI-Brent spread narrowed to ($5.81) on Monday and will likely continue to narrow over the next few days as it approaches a key threshold at ($4.40). This is the 62 percent retracement of the decline from $1.01 to ($13.13). The narrowing spread is currently a result of strengthening WTI prices and a weaker outlook for Brent. Ultimately, weaker Brent prices and a narrow spread could put another wave of downward pressure on both WTI and Brent. It will likely take at least a few more days, but look for the spread to stall near ($4.40).
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