WTI and the Changing Dynamics of Global Crude Oil

[OddTrader]

WTI and the Changing Dynamics of Global Crude Oil

13 Jan 2017

http://www.cmegroup.com/education/wti-and-the-changing-dynamics-of-global-crude-oil.html

Summary

The rise in importance of the U.S. crude market comes at a challenging time for crude oil markets in Europe. In the North Sea, as oil producers battle to maintain output in a lower oil price environment, U.S. drillers would appear to have a much more flexible cost base on which to adjust to different levels of price. Given the rise in U.S. production over the past five years, the role of WTI as the price reference for the marginal barrel of oil has increased significantly, and consequently, WTI has become the price leader again.

One potential opportunity could be that global markets adopt more WTI based pricing into their crude oil contracts. The lifting of the U.S. export ban has had a significant impact on global oil flows, and will lead to greater market efficiencies as companies look to gain arbitrage opportunities with the improved logistics of free trade. As a result, WTI has fully re-gained its status as the leading indicator for price discovery in the crude oil market.

 

[murray t turtle]

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O Trader; i thought your oil storage chart was off because of something i read in Bloomberg[highest since great depression, Bloomberg noted ]; but probably not-- i saw the exact same chart on ''Oil + Gas 360''LOL [They noted its highest since they kept records, since 2011.Thanks