Int'l Weekender: Let's Talk About Brent Baby
- So far in 2012, Brent has traded ~US$15/bbl to US$20/bbl higher than WTI and ~US$10/bbl higher than Edmonton Par.
- Various international oil markers (such as Vasconia in Colombia) which used to correlate to WTI have been 94% correlatedto Brent over the past 12 months. Cf. page 3 for details.
- Using yesterday’s CFPS “beat” by Parex (versus in-line with our estimates) – PXT had pre-reported production – as one datapoint, we believe the linkage of international oil prices (in Colombia and other) to Brent (versus WTI) might not be as widelyspread as we would expect.
- We continue to model US$100/bbl Brent flat, but have run some sensitivities (at oil price ranges up to US$125/bbl) to givean indication of the upside potential if Brent remains at current levels (cf. page 3).