<article><p>A new market for WTI from Midland has developed — and become fairly active — at Magellan's crude terminal in east Houston, Texas, owing to new pipelines out of the Permian basin. </p><p>Ever since Shell reversed its Ho-Ho pipeline to run east from Texas to Louisiana in late 2013, market participants on the Texas coast have awaited the development of an active market for light sweet crude, one similar to the highly liquid Light Louisiana Sweet (LLS) benchmark in Louisiana. Previously, a lack of takeaway capacity from the Permian constrained volumes below what an active market requires. </p><p>That changed in December, with the start of Plains' 250,000 b/d Sunrise pipeline enabled the delivery of greater volumes of West Texas Intermediate (WTI) from the Permian area to Houston, Texas. Soon after, an active market sprang up at the Magellan east Houston terminal for volumes delivered via the Plains/Magellan 300,000 b/d BridgeTex line as well as Magellan's 275,000 b/d Longhorn pipeline. </p><p>Since 8 December, bids and offers as well as several trades have taken place for WTI Midland at Magellan's east Houston terminal, many of which are quoted on an LLS basis.</p><p>Yesterday morning, Permian light sweet traded at the Magellan east Houston terminal at a discount of $1.25/bl to WTI Cushing. Later in the session, Permian WTI changed hands at a discount of $3.50/bl to LLS, or a discount of 90¢/bl to 80¢/bl to WTI Cushing. At a discount of $3.50/bl to LLS, the Houston trade was at parity to the level at which the grade traded in the previous session. Owing to the firmer LLS price, Wednesday's WTI Cushing equivalent was at a discount of $1/bl to $1.05/bl.</p><p>Market participants see the activity at the Magellan east Houston terminal continuing, and even picking up, in the future, possibly leading to the development of a light sweet marker in Texas, paralleling the role played by LLS in Louisiana.</p><p>ss/tdf</p><p><br> Send comments to <a href="mailto:feedback@argusmedia.com" target="_parent"> feedback@argusmedia.com </a></p><p><u><a href="http://www.argusmedia.com/Info/General/News" target="_TOP"> Request more information </a></u> about Argus' energy and commodity news, data and analysis services. </p><p><i> Copyright © 2014 Argus Media Ltd - <a href="http://www.argusmedia.com/" target="_TOP"> www.argusmedia.com </a> - All rights reserved. </i></p></article>
