The price spread between US WTI and Britain’s Brent crude has narrowed to just $2.78 per barrel. This is the tightest level since September of last year.
The American active rig count has fallen to the lowest point since November 2021, according to Baker Hughes. At the same time, wildfires in Canada’s Alberta province have forced a 7% reduction in oil output. These events have driven up prices for US crude.
Price Futures Group analyst Phil Flynn notes the current price environment makes American oil exports to Europe economically unviable. With the price spread below $4 per barrel, crude shipments become unprofitable. As he emphasizes, this could lead to domestic inventory buildup.
In contrast, OPEC+ nations are actively ramping up oil production. Since April, the alliance has increased output by 1.37 million barrels per day, offsetting potential global supply shortages. These actions by exporters are exerting additional downward pressure on prices and may accelerate the decline of US crude exports.