There is no debate about it: The CME/NYMEX domestic sweet (DSW) crude oil futures prompt-month contract at Cushing, OK, is the most closely followed benchmark in U.S. energy markets. It’s the price quoted in nightly news reports and general media publications. And now, with U.S. exports of WTI deliverable on the Brent contract, domestic sweet at Cushing is arguably setting the price for crudes around the world. But the fact is, most crudes traded in physical markets across North America are not priced at the DSW-at-Cushing benchmark but instead at a differential to Cushing — higher or lower on any given day based on each crude’s unique quality, location, and supply/demand characteristics. In today’s RBN blog, we discuss how the behavior of differentials from the Cushing benchmark can go a long way to explain what is happening with crude oil production, transportation volumes, storage and, of course, exports.
There are many crudes traded across North America, each with its own density (measured in API degrees), sulfur content (measured in percentages), total acid number (TAN), and other qualities. The value of all these crudes, with names like Midland Sweet (MIDSWT), Magellan East Houston (MEH), Mars, Bakken, West Texas Light (WTL), and Western Canadian Select (WCS) are typically quoted as differentials to the price of DSW deliverable on the NYMEX Cushing contract (see Trading in the USA).
The Crude Oil Billboard keeps readers at the forefront of the U.S. crude oil market by offering access to data and information moments after its release. Say goodbye to PDF reports that come out after the market has already moved on.
It is well-known and understood in the rarified world of U.S./Canadian crude oil traders that the behavior of those differentials can explain a lot about what is happening to crude oil production, transportation volumes, the ups and downs of storage, and — so important today — exports. But to make use of that window on crude markets you’ve got to have access to the data, have the means to put current price behavior in a historical perspective, and have the expertise to interpret what it means when differentials widen, narrow, flip (premium vs. discount), or blow out. Other than those rarified U.S./Canadian traders referenced above, most mortals are oblivious to these insights. Until now.
Warning: Today’s blog is an unabashed advertorial for TradeView: Crude Oil Price Analytics, a new report and dataset developed by RBN and Link Data Services (LDS), the data provider arm of Link Crude Resources, the leading Gulf Coast physical crude brokerage firm. More about LDS in a minute. For now, suffice to say that LDS provides data and insights about what makes physical crude oil markets move. RBN does the data analytics, interprets the trends and prepares an understandable explanation of what is going on in the markets. The idea is to put U.S./Canadian crude oil trades in a context that anyone can wrap their head around, and provide real value to a wide range of market participants and market followers — from those rarefied physical oil traders to market analysts, business development folks, and global players who are not intimately familiar with the peculiarities of U.S./Canadian crude markets.
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About the song
The Price Is Right game show first came on the air in November 1956, hosted by Bill Cullen — that iteration of the show ran to September 1965. The Price is Right was revived in September 1972, this time with Bob Barker hosting — and with a new theme song that has played at the beginning and end of each show ever since. The theme song, which can be difficult to get out of your head, was written by Edd Kalehoff. He has said that the show’s music was recorded via a mix of synthesizer and Moog work. Kalehoff also wrote the themes for many other shows, including ABC’s World News Tonight, The View and The PBS NewsHour. He also recorded the ticking-clock intro for “60 Minutes.”
The Price is Right is the U.S.’s longest-running game show, with a total of more 59 years under its belt. In the show, members of the studio audience are selected to “Come on down!” to compete — they guess the prices of merchandise to win prizes. As we said, Bill Cullen hosted the show from 1956 to 1965 and Bob Barker was the show’s host from 1972 to 2007, when Drew Carey took over. In a 2007 article in TV Guide — remember TV Guide? — The Price is Right was named it “the greatest game show of all time,” and in April 2022 the show was inducted into the NAB Broadcasting Hall of Fame. And yup, TV Guide is still published!
