Infrastructure Changes Unlikely To Reduce Cushing Glut Before 2014

Despite a series of new pipeline plans BMI does not expect consistent draws on Cushing stocks until 2014. Indeed, production growth in both Canada and onshore US is likely to drive stock growth in the near term. We therefore do not anticipate a narrowing of the WTI-Brent spread until Q413 or Q114. Our current forecasts point to spreads of US$15/bbl in 2012, falling to US$10/bbl by 2014 and US$8/bbl by 2015.

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