WTI goes global
Overview
WTI Midland is now the world’s largest freely traded grade of crude oil by output and volume. In December 2015, the US lifted a 40-year ban that had restricted exports of US crude overseas. Since the ban was lifted, export volumes have soared and US crude now makes its way to markets all over the world.
The meteoric rise of US crude on the global stage has made Permian basin crude WTI Midland the world’s most important grade and has put the US Gulf coast at the epicentre of global crude trade. Houston is the point of greatest optionality for crude oil. From Houston, crude can be refined in the world’s largest refining centre, moved domestically within the world’s largest oil demand hub, and exported to all corners of the globe. Price dictates these options, making the price at Houston the source of all key comparisons.
Light sweet WTI Midland is now firmly at the centre of price discovery for crude oil. It is a key component of Dated Brent and the global swing barrel, and European and Asian buyers are beginning to purchase crude on a WTI Houston basis. This crude has truly emerged as the heartbeat of the global crude system.
A global waterborne crude, underpinned by a liquid pipeline market
In most major markets, crude oil is generally transported by water. But the WTI Houston and Midland markets are different, with oil travelling first by pipeline in small, rateable transactions. The high volume of daily transactions means that there are many points of price discovery throughout the day. Our expert team of crude oil market reporters endeavour to capture it all.
Cargo markets by nature consist of a few, large single trades. But at the US Gulf coast, cargoes are priced at a differential to the pipeline market, so they benefit from the underlying price dynamics of the highly liquid and transparent US pipeline market.
For this reason, understanding the WTI supply chain and the drivers of its price formation is imperative for anyone buying, selling or trading crude oil across the globe.
WTI and Argus, a deeply rooted relationship
For two decades, Argus WTI assessments at Midland and Houston have been the standard physical benchmarks for US crude, as well as the settlement indexes for a robust derivatives market. These prices are assessed as differentials to the Argus WTI formula basis, based on the Nymex light sweet crude futures contract — one of the world’s most actively traded oil futures. They are the clear choice for trading companies seeking to manage WTI positions in the physical and paper markets.
Argus WTI Houston and Argus WTI Midland collectively form the basis of the world’s third-largest crude oil derivatives market, after Nymex light sweet and Ice Brent. The contracts are actively traded over the counter and cleared by oil brokers through exchanges such as CME and Ice.
Our rich, deep and trusted coverage of the US crude oil market is unrivalled. You need Argus to make confident business decisions.
Latest crude oil news
Browse the latest market moving news on the global crude oil industry.
Opec+ eight to delay, extend unwinding of 2.2mn b/d cut
Opec+ eight to delay, extend unwinding of 2.2mn b/d cut
Dubai, 5 December (Argus) — Some Opec+ members have agreed to push back by three months, to April, a plan to gradually return 2.2mn b/d of production to the market, delegate sources told Argus . Eight countries ꟷ Saudi Arabia, Russia, Iraq, Kuwait, the UAE, Kazakhstan, Algeria, Oman ꟷ were scheduled to begin unwinding the 2.2mn b/d cut over 12 months, starting from January. But three delegate sources today said the group will delay the start of this plan to April. The full amount will be returned over 18 months, according to one of the sources. This would reduce the amount of oil being introduced to the market every month. But the return of this output should, in theory, be partly offset by members who have pledged to compensate for exceeding their production targets this year. Argus calculations show that of the eight countries, only Algeria does not have any overproduction to compensate for. Iraq has the most, followed by Kazakhstan, Russia and Gabon. By Nader Itayim, Bachar Halabi and Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Brazil's economy accelerates to 4pc growth in 3Q
Brazil's economy accelerates to 4pc growth in 3Q
Sao Paulo, 4 December (Argus) — Brazil's economic growth accelerated to an annual 4pc in the third quarter, led by stronger consumer spending, according to government statistics agency IBGE. The economy accelerated from 3.3pc annual growth in the second quarter and posted the fastest growth since the first quarter of 2023. Household consumption grew by 5.5pc in the third quarter from a year earlier, while government spending increased by 1.3pc. Services grew by 4.1pc. The industry sector grew by an annual 3.6pc, driven by civil construction and five-year high automotive production in July , according to the national association of vehicle manufacturers. Exports rose by 2.1pc, while imports grew by 18pc. The oil, natural gas and mining industry contracted by 1pc, thanks to lower oil and gas exploration and production. Brazil produced 4.35mn b/d of oil equivalent (boe/d) in the third quarter, down from 4.51mn boe/d in the July-September 2023, according to oil and gas regulator ANP. The electricity and gas, water and sewage management sector increased by 3.7pc from July-September 2023, favoured by higher demand despite higher power tariffs. Brazil faced a severe drought in the first two quarters of the year that lowered river levels at hydroelectric plants and increased power charges in September. But the agriculture and cattle raising sector fell by 0.8pc, with expected production of significant crops such as corn and sugarcane dropping from a year prior also because of adverse weather. Still, output of cotton, wheat and coffee increased by 14.5pc, 5.3pc and 0.3pc, respectively, according to IBGE. The investment rate — the percentage of a country's total production that is invested — grew to 17.6pc in the third quarter, an increase of 1.2 percentage points from the same period in 2023. Brazil's GDP growth in the third quarter was up by 0.9pc from the second quarter, reaching R3 trillion ($494bn). By Maria Frazatto Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Industry wary of Trump tariffs on Canada, Mexico
Industry wary of Trump tariffs on Canada, Mexico
Washington, 3 December (Argus) — US president-elect Donald Trump's plan to impose 25pc tariffs on all imports from Canada and Mexico could have a profound impact on the US oil and gas industry and the US' diplomatic efforts, energy industry representatives said at an industry conference on Tuesday. Cenovus Energy, the second-largest oil and gas producer in Canada, is paying close attention to Trump's rhetoric on trade, and trying to "educate" policymakers in the incoming Trump administration on how tariffs on Canada could impact North America's deeply integrated energy system, Cenovus director of US government affairs Steve Higley said at the North American Gas Forum in Washington, DC. The US in 2023 imported 3.9mn b/d of crude oil from Canada and 730,000 b/d from Mexico, accounting for 60pc and 11pc of US crude imports, respectively, according to US Energy Information Administration (EIA) data. Refineries in the US Midwest's PADD 2 region also process about 2.5mn b/d of Canadian crude, Higley said. The US also exports a significant amount of natural gas to Mexico — 6.2 Bcf/d (176mn m³/d) in 2023, according to the EIA — which is another "reminder of how integrated the North American energy system is," said Dustin Meyer, senior vice president of policy at the influential trade group American Petroleum Institute (API). Retaliatory tariffs by Mexico, threatened by Mexican president Claudia Sheinbaum last week in response to Trump's initial threat of tariffs, would likely impact that gas trade. Sheinbaum and Trump have since taken on a more conciliatory tone toward the subject after the two had what Trump called a "wonderful" conversation. API repeatedly called on Trump in his first administration to de-escalate his trade dispute with China, which it said threatened investment in US LNG. A section of API's website on trade titled "The Truth about Tariffs" reads: "Tariffs are taxes on imported goods that increase costs for consumers." Aside from the threat of tariffs causing "alarm" in Canada, it is not clear how US consumers would benefit from a tariff on all Canadian products, including oil and gas, said Robert Johnston, senior director of research at Columbia University's think tank Center on Global Energy Policy. On the diplomatic front, there is a "tension" between the incoming Trump administration's argument that US oil and gas production must be increased to support American allies, when it is also threatening tariffs to support American industry over that of its trade partners, Johnston said. The initiation of new trade disputes could also erode the US' ability to compete with China, said Jason Grumet, chief executive of trade group American Clean Power Association. "Are we trying to take China on alone, or are we trying to build a global economy of the democratic nations who have been our allies for 50 years?" Grumet asked. Whether the incoming Trump administration will actually go ahead with tariffs on Canada and Mexico is far from certain. From its rhetoric, the administration appears to care deeply about narrowing the US' trade deficit, leveraging its massive energy production on the global stage, and keeping energy prices low for US consumers, Meyer said. But "if that's the vision, what is the form that specific policies take?" he asked. By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
India's SPR, MRPL sign crude storage deal
India's SPR, MRPL sign crude storage deal
Mumbai, 3 December (Argus) — Indian Strategic Petroleum Reserves Limited (ISPRL) has signed an agreement with state-owned refiner MRPL to store and manage crude at the former's Mangalore facility. ISPRL plans to lease around 750,000t of its 1.5mn t (11mn bl) Mangalore storage site in the southern Karnataka state to MRPL for 3-5 years, an official told Argus . Iraqi Basrah Heavy and Basrah Medium are likely to be stored in the cavern, another source close to the matter said. Abu Dhabi's state-controlled Adnoc has held around 5.86mn bl of crude at the Mangalore facility since a deal signed in 2018, and is the only foreign company to do so. Adnoc received permission from the Indian government in March 2024 to export crude from its stocks at the Mangalore facility, but has not done so. ISPRL has also leased out 300,000t at its 1.33mn t Visakhapatnam facility to state-controlled refiner HPCL for 2024-27. ISPRL has underground crude oil storages of 1.33mn t at Visakhapatnam in Andhra Pradesh state, 1.5mn t at Mangalore and 2.5mn t at Padur in Karnataka state, putting the total capacity at 5.33mn t. ISPRL is responsible for maintaining India's crude oil reserve for emergency use in case of a shortage. India's 5.33mn t storage capacity can provide for about 9.5 days of crude oil requirements, according to a government document. Oil marketing companies have storage facilities for crude oil and petroleum products for 64.5 days, which brings the current total national capacity for storage of crude oil and petroleum products to 74 days. India is the world's third-largest consumer of crude oil and depends on imports to meet around 90pc of its requirements. Given its heavy reliance on imported crude, the country is looking to expand its strategic petroleum storage to mitigate any supply disruptions. The continuing Middle East conflict has raised worries about any impact on supply and prices. Indian oil and gas minister Hardeep Singh Puri has said that global crude oil supply from traditional and non-traditional producers remains ample despite the conflict and that India is confident of navigating any challenges this may pose. The deal also comes as India focuses on diversifying its crude sources, having ramped up imports from Brazil and Venezuela in November. By Roshni Devi and Rituparna Ghosh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Why Argus WTI?
Unrivalled methodology
Argus reports the US Gulf coast pipeline market the way it trades, rather than forcing it into a one-size-fits-all methodology. We publish volume-weighted average indexes for each assessed grade and location using reported deals done, and publish the underlying deals themselves. This provides our subscribers with accuracy and convenience, as well as a transparent audit trail.
An all-in-one view of your data
Hourly snapshots of the WTI Midland and WTI Houston markets can be viewed on the Argus Crude Market Ticker, also accessible on CME Direct. And for the first time, Argus WTI Midland and Houston futures can be traded directly on-screen through CME Direct, including by entities that do not retain a cash market broker.
Innovation and responsiveness
Argus has reported waterborne cargo prices for WTI Midland for several years on both fob US Gulf coast and delivered-Europe and Asia bases. As the market has developed, so has our approach. In November 2022, we augmented our rolling price for fob Midland WTI by reporting three intramonth periods, to better reflect market structure and the way cargoes are traded.
An expert reporting team
The Argus WTI Houston and Midland assessments are underpinned by the expertise of our Americas editorial team. We demystifying these complex markets through independent and transparent pricing, built on the strength of our relationships with the market. We have been surveying these pipeline markets for decades, meaning we understand the vital connections and nuances that exist.
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Our commentary on the rise of WTI
