Oil benchmarks should diverge in coming year, says BAML’s Blanch

A spike in North American oil production and seasonal changes in demand should see WTI fall sharply later this year – a contrast with Brent, which is exceptionally stable, says BAML global head of commodities research in an exclusive video

The spread between the two most liquid global oil benchmarks is likely to widen later this year, as West Texas Intermediate (WTI) crude suffers a “major correction”, according to Francisco Blanch, the global head of commodities research at Bank of America Merrill Lynch.

Speaking to Energy Risk in Houston on May 22, where Blanch gave a keynote address to Energy Risk Summit USA, he said he expected WTI to fall sharply later this year. That correction was likely to hit between August and October