The premium for European oil benchmark Brent to the U.S. oil marker, New
York Mercantile Exchange light, sweet crude, could narrow to $6.50 a barrel
within half a year, and not a year as previously forecast, Goldman Sachs said
Thursday.
"The reversal of the Seaway [pipeline] would likely displace the
congestion [in the U.S. Midwest] and use of expensive barge transportation to
move oil to the U.S. Gulf Coast," Goldman Sachs said in a note.
But the bank expects that new rail capacity will continue to be required to
ship oil.
"Net, this suggests WTI-Brent spreads closing more rapidly to the level
consistent with rail economics," Goldman Sachs added.
At 1059
GMT the spread stood at $8.25 a barrel.