The Brent-WTI Spread is still at relatively low levels.
The Brent-WTI Spread rose in May 2018 and peaked in June 2018. The Brent-WTI Spread Chart indicated that the difference between Brent and West Texas Intermediate was at its highest level since February 27, 2015 at its peak on June 7, 2018. However, this peak and drop-off while high for the past three years is not as high nor as dramatic as the movements that took place prior to 2014.
Brent-WTI Spread Daily Chart
The Brent-WTI Spread Death Cross
The WTI-Brent Spread just experienced a Death Cross on August 14, 2018. The 50 SMA fell below the 200 SMA on a Daily Chart. Interestingly this is happening in the midst of a rise in the spread that has been the theme thus far in August 2018. The price of West Texas Intermediate has fallen in July and August after peaking to a level unseen since November 28, 2014. 3 is the Support Level for the spread.
The WTI-Brent Spread actually was a leading indicator for the eventual decline (albeit very modest) in WTI in July and August. Zoomed out there is more to this Death Cross though.
A Death Cross for the WTI-Brent Spread has preceded price declines in West Texas Intermediate in the recent past. The other scenario is that the market flattens. It actually works the same way with Golden Crosses, but it is not as dramatic as the Death Cross.
The measured trading volume prior to 2015 was much less than from 2015 and beyond. In fact, once the trading season (starts the day after U.S. Labor Day) started again in September 2014, there was a significant growth in volume and levels that were much higher despite less volatility.
The major dropoff of 2014 in West Texas Intermediate was accompanied by a dramatic rise in trading volume. The less pronounced rise in West Texas Intermediate and the return to higher volume as compared to conditions in 2017 is a symptom of a different sort of a market.
With more diversified sources of oil production (by country) speculators are recognizing that OPEC does not enjoy the power that it once wielded. The current environment also features a stronger U.S. Dollar in a world that includes an Australian Housing Bubble possibly bursting, a fracturing European Union that has not recovered economically, a bear market in China, and Emerging Markets (Turkey, Brazil, Argentina) crumbling due to their own malfeasance and challenges of reformation in the aftermath of corruption.