Western Falls on Goldman Forecast of WTI Discount: Dallas Mover

Western Refining Inc. (WNR), the owner of refineries in Texas and New Mexico, fell the most in more than four months after Goldman Sachs Group Inc. predicted the price difference between U.S. and international crude would start to narrow in June.

Western fell 8.3 percent to $18.48 at the close in New York. It was the biggest decline since Nov. 17, the day after Enbridge Inc. and Enterprise Products Partners LP announced they would reverse the Seaway pipeline to bring more crude from Cushing, Oklahoma, to Texas refineries.

The reversed Seaway pipeline is expected to open by June, making the price of West Texas Intermediate crude, the U.S. benchmark, closer to that of Brent oil, a global benchmark, David Greely and Stefan Wieler, analysts with Goldman Sachs, said today in a note to clients.

The spread between Brent and WTI rose to $20.87 on April 4, the highest point since the Seaway pipeline reversal was announced, according to data compiled by Bloomberg. The discount narrowed 7.6 percent today in New York, according to data compiled by Bloomberg.

Western operates refineries near new U.S. oil production, which has surged to the highest level in 12 years and oversupplied a storage hub at Cushing, reducing prices.

Lower WTI prices have allowed Western, HollyFrontier Corp. (HFC) and other refiners with plants in the middle of the U.S. to pay less to supply their facilities, boosting profit. In 2011, Western had net income of $132.7 million, the highest since 2007.

HollyFrontier fell 6.2 percent to $29.58, the largest decline since Nov. 23.

To contact the reporter on this story: Bradley Olson in Houston at bradleyolson@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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