ASCI

In the early 2000s, prices for West Texas Intermediate (WTI) were becoming increasingly disconnected from global fundamentals. WTI reflected conditions in the Midcontinent at the Cushing, OK, crude oil storage hub, where bottlenecks repeatedly distorted its value. In today’s RBN blog, we look at how the problem contributed to the creation of the Argus Sour Crude Index (ASCI) 16 years ago, how the index has evolved and whether it remains relevant today. 

Ever since crude oil prices began their precipitous fall in June 2014 market watchers have picked through the tealeaves of every OPEC statement - particularly those of Saudi Arabia - for signs of a change in policy. One widely watched signal comes every month when the Saudi’s publish differentials that determine the price customers pay for their crudes. Today we explain how Saudi pricing formulas work.

Permian crude production is experiencing a renaissance. This month (September 2012) Bentek estimated current production at 1.3 MMb/d. Most of that production not absorbed by local refineries is shipped to Cushing or further into the Midwest where prices are depressed versus the Gulf Coast. New takeaway capacity projects look to change that balance towards the Gulf Coast over the next two years. Today we explore how West Texas crude prices will be impacted by access to the Gulf Coast.