The price differential for physical crude oil that is delivered from the heart of the Permian into Midland, TX, known as WTI Midland (the real WTI), has deteriorated in the past two months to lows last seen in early August. As discussed in RBN’s TradeView report, WTI Midland has been drifting lower since early September, recently hitting $0.25/bbl on October 22 (red dashed circle in chart below) over the price of NYMEX-CME Domestic Sweet (DSW) — the commonly quoted prompt month futures contract price of crude oil — before making a recovery to around $0.50/bbl at the start of this week. The recent low was the worst reading since late July when the differential was hovering at less than $0.10/bbl and is a sharp drop from north of $1.00/bbl seen in early September (green dashed circle, see our Analyst Insight of September 2).
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