Prices for prompt delivery of West Texas Intermediate (WTI) crude as quoted on the CME/NYMEX futures exchange fell by 60% from their high over $107/Bbl in June 2014 to a low under $44/Bbl on March 17, 2015. After recovering about 37% in April and May WTI prices have remained stuck close to $60/Bbl ever since - closing yesterday (June 23, 2015) at $61.01/Bbl. With market contango narrowing, inventory levels falling, and refinery throughputs rising – why aren’t prices moving higher faster? Today we review the fundamental data.
The West Texas Intermediate (WTI) discount to Brent has narrowed 30 percent in 2013 to close at $13.95/Bbl on Friday March 22, 2013. At the same time Gulf Coast Light Louisiana Sweet (LLS) prices have moved unexpectedly to a $6.75/Bbl premium over Brent. Is the WTI discount to Brent finally unwinding? If so – then why are LLS prices trading above Brent? Today we update our analysis of the WTI/Brent spread.
Bakken crude oil has traded at an $8-$10/Bbl discount to WTI for the past few weeks, and a few times since January this year has blown out to more than $20/Bbl. We talked about some of the reasons for this volatility in the first two installments of “The Bakken Buck Starts Here”, covering the mysteries of crude postings and pipeline hub pricing. Ultimately however refiners are more concerned with delivered crude oil prices. Today’s installment of The Bakken Buck Starts Here – Bakken Crude Pricing Part III compares delivered crude costs to four US refining centers.
West Texas Intermediate (WTI) is the benchmark price for essentially all crude produced in the U.S. But few crudes are actually priced at the WTI level. Most are subject to some kind of discount based on location, quality or competitive conditions. And that means that producers and royalty owners rarely realize a WTI price.
Last Friday we began to delve into crude oil pricing in the Bakken by explaining crude oil postings. Today’s blog is the second in a series designed to uncover how crude is priced, what the transportation costs are and how refiners determine the profitability of processing one crude versus another. In Part II of our tutorial on crude oil pricing, we compare posted prices with the pipeline hub trading markets for Bakken crude at Clearbrook, Minnesota and Guernsey, Wyoming.