CRAK - Crude oil spreads are tightening causing stress for refiners

halbergman/E+ via Getty Images Oil prices have dropped in volatile trade since OPEC's failure after powering higher for most of this year, but oil spreads - the difference between international and U.S. crude prices - are falling. Brent crude settled today -1.5% at $73.43/bbl, while U.S. WTI crude closed -1.6% at $72.20/bbl, but the slim $1.23 difference is unusual, given that the average spread over the past few years is ~$5.50/bbl. Much of the reason for the tight spreads is a lack of U.S. inventory and higher U.S. prices. "U.S. crude inventories are currently in a massive 31M-barrel deficit to seasonally normal levels," RBC analyst Michael Tran writes. "Domestic U.S. [economic] fundamentals continue to fast forward, at an accelerated pace, relative to the rest of the world." Refiners like low-price, plentiful domestic crude supplies and strong demand from gasoline in foreign markets, which enables them to essentially buy low and

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Crude oil spreads are tightening, causing stress for refiners