The differential between the WTI frontline swap and the Dubai swap is at its widest since mid-January, possibly opening up arbitrage opportunities for imports into the US, Platts data showed.
The December Dubai swap was trading at a $1.10/b discount to the December WTI frontline swap on Wednesday. The highest the differential between the WTI frontline swap and the Dubai swap has been in 2015 was on January 14, at $2.19/b, Platts data showed.
Dubai swaps have historically traded at a premium to the WTI frontline swaps. A stronger WTI swap opens up arbitrage opportunities for Dubai-based crude imports into the US, like ESPO, to arrive in the US West and Gulf coasts, as Dubai becomes more competitive against WTI-based crudes.
The WTI frontline swap was assessed at $47.71/b Wednesday at 3:15 pm EST (2015 GMT). The Dubai swap was assessed at $46.61/b.
WTI continues to receive support from ongoing reductions in US drilling rig counts and the conclusion of the autumn maintenance period, analysts said.
In addition, WTI's relative strength was supported by a moderate build in crude stocks, with a seasonal decline in distillates and gasoline inventories and a stronger US dollar, Platts data showed.
