May 1 (Reuters) - The spread between Brent and U.S. crude futures could widen sharply at the end of the year, depressing U.S. oil prices, as refinery maintenance reduces crude demand, J.P. Morgan Chase said late on Monday.
"We expect the spread to be very volatile, pushing above $15 a barrel at the end of the year as the three-month-long maintenance at the BP Whiting refinery kicks in just ahead of the expansion of the Seaway pipeline," J.P. Morgan analysts led by Lawrence Eagles said in a weekly oil report dated April 30.
"We also anticipate a further brief widening of the Brent-WTI spread at the end of the first quarter in 2013 when seasonal maintenance in the PADD 2 region will likely temporarily increase the regional surplus."
The bank also revised down its 2012 forecast for West Texas Intermediate (WTI) crude prices by $3 to $108 a barrel although it kept forecasts for Brent unchanged on Asian demand and stable supply dynamics.
On Tuesday, Brent's premium to WTI was at $14.55 a barrel after settling at $14.60 on Monday.
A reversal in oil flow at the Seaway pipeline from mid-May could first narrow the Brent-WTI spread to $6 per barrel or less, J.P. Morgan said.
The project is aimed at easing high crude oil stocks at Cushing, Oklahoma, the delivery point for WTI contracts, and also the downward pressure on prices.
Crude stocks reached record levels in Cushing last year, pushing the Brent-WTI spread to its widest at nearly $28, due to a lack of pipeline capacity to divert the excess supply and as production from U.S. and Canada oil shales rose.
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