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.
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Hurricane Milton leaves 3.4mn in the dark
Hurricane Milton leaves 3.4mn in the dark
New York, 10 October (Argus) — About 3.4mn customers in Florida were without power this morning after Hurricane Milton pummeled the state with heavy rainfall and strong winds. Utility crews began the process of assessing and repairing the damage caused by the hurricane which tore down trees and downed power lines after slamming into Florida's west coast as a powerful Category 3 hurricane late Wednesday. Florida Power & Light had about 1.2mn homes and businesses without electricity, Duke Energy reported about 875,000 outages, while about 592,000 customers of Tampa Electric were affected, according to independent tracker Poweroutage.us. Milton, which has since weakened to a category 1 storm with maximum sustained winds of 85mph, is now moving off the east coast of Florida. "On the forecast track, the center of Milton will continue to move away from Florida and pass to the north of the Bahamas today," according to the National Hurricane Center. The risk of life-threatening storm surge remains on the eastern coast of Florida, while hurricane-force winds are expected to linger for a few more hours. Major flooding as a result of heavy rainfall also continues to pose a threat. A recovery in road fuel supplies, which were strained by the pre-storm evacuation of hundreds of thousands of residents, will depend on the extent of power, roadway and port outages. The state has waived statutes regulating the sale, storage and distribution of liquid fuels . By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Cop 29 president calls for progress on finance
Cop 29 president calls for progress on finance
Edinburgh, 10 October (Argus) — The president-designate of the upcoming UN Cop 29 climate summit, Mukhtar Babayev, has urged parties to progress on a timeframe and an amount for the new climate finance goal to be decided at the conference in Baku next month. At a pre-Cop meeting today, Babayev stressed the need to "take seriously the responsibility for identifying a number over a timeframe and come forward with solutions". "We cannot afford to leave too much to be decided at the summit," he added. Cop parties must agree in November on the new collective quantified goal (NCQG) — building on the current $100bn/yr target that developed countries agreed to deliver to developing countries over 2020-25. But there remains a huge divide to bridge between developed and developing nations ahead of Cop 29 . Developed countries have yet to commit to a number for climate finance, while developing nations have for some time called for a floor of at least $1 trillion/yr. The Cop 29 presidency is seeking to build on "possible convergence on certain elements" to provide a solid foundation to discussions on other parts of the goal, Babayev said. Elements for the formulation of the goal include an amount for the NCGQ, timeframes, scope, sources, as well as accessibility and transparency. Babayev did not provide details on potential convergence, but some common ground was found during technical discussions on elements such as access and transparency. "Qualitative elements of the goal such as transparency and accessibility are also essential to ensuring that the goal is both fair and ambitious," he said. "The substantive framework for the draft negotiation text" on the NCGQ will be released in the next few days, according to Babayev. The NCQG is Cop 29's "top negotiating priority", Babayev said, but he also urged parties to turn pledges made last year for the loss and damage fund — which will support vulnerable countries with the irreversible and unavoidable effects of climate change — into contributions. He said that countries need to "respond to the goal of the UAE consensus [Cop 28 agreement] to transition away from fossil fuels in a just and orderly manner taking into account different national circumstances". There is "no time for us to allow for anyone to try and backpedal on what we have collectively committed to in Dubai," Cop 28 president Sultan al-Jaber said at the meeting today. Cop 28 last year ended with an agreement that included transitioning away from fossil fuels and tripling renewable energy capacity globally by 2030. Al-Jaber said that the next NDCs must be aligned with the Paris agreement and the Cop 28 deal to keep 1.5°C — the Paris accord's most ambitious temperature limit — within reach. NDCs "must be economy-wide, cover all greenhouse gases and seize the opportunity of climate action as a driver for sustainable growth", he said. He recognised the efforts of G7 countries in including references to the Cop 28 agreement in their final communique and that he "was very hopeful that the same would happen at G20" later this year. G7 countries in May committed to phasing out "unabated coal power generation" by 2035 — putting a timeframe on a coal phase-out for the first time. They also pledged "to transition away from fossil fuels" in energy systems in a just, orderly and equitable manner, accelerating actions in this critical decade, to achieve net-zero by 2050 in keeping with the best available science", which is the language used in the Cop 28 text. Heads of states and governments in September adopted a pact that also included this wording ahead of the UN general assembly . By Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Strike starts at Chevron Australia's LNG sites: Update
Strike starts at Chevron Australia's LNG sites: Update
Adds comment from Altrad spokesperson in paragraph 3 Sydney, 10 October (Argus) — Members of Australian LNG workers' union the Offshore Alliance (OA) that are employed by companies owned by engineering firm Altrad are undertaking protected industrial action (PIA) at Chevron Australia's two LNG facilities. About 140 gas maintenance workers began rolling stoppages and work bans today because of dissatisfaction with negotiations for a new enterprise bargaining agreement, the OA said. The PIA can occur for 30 days from when the results of a union members' ballot was declared on 2 October, and may be extended if agreed by the Fair Work Commission. Altrad remains committed to the continuing bargaining process, a spokesperson for the firm said on 10 October, promising to "continue to seek an equitable outcome to negotiations" in the interests of employees and Altrad. Workers are demanding union rates and conditions on every offshore and onshore oil and gas facility, the OA said, promising to push back against baseline workplace agreements presently in place. Striking staff include technicians, scaffolders, riggers, painters and plasterers working for Altrad at the Chevron's 8.9mn t/yr Wheatstone LNG and 15.6mn t/yr Gorgon LNG facilities in Western Australia state, as well as Wheatstone's offshore platform. Chevron Australia is aware Altrad employees have started industrial action, but said no impact to production are expected. "Given the nature of the work undertaken by Altrad and the mitigations in place, it is not anticipated there will be any impact to LNG and domestic gas production nor to any critical business activities at our facilities," a Chevron spokesperson said on 10 October. The dispute comes almost 12 months after Chevron reached an agreement with the OA — formed by the Australian Workers' Union and Maritime Union of Australia — on three deals regarding pay and conditions at its LNG terminals and upstream facilities. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Hurricane Milton closes in on Florida: Update
Hurricane Milton closes in on Florida: Update
New York, 9 October (Argus) — Strong winds and heavy rainfall are lashing Florida's west coast ahead of Hurricane Milton, which is forecast to make landfall late tonight as a major hurricane. The growing risk of life-threatening storm surge and flooding have sparked mass evacuations given Milton's potential to be one of the most destructive hurricanes on record to strike the region. Multiple tornado warnings have also been issued across the Florida peninsula. Milton was located about 100 miles southwest of Tampa at 4pm ET today, packing maximum sustained winds of 125mph, according to the National Hurricane Center. It was moving to the northeast at 17 mph. "On the forecast track, the center of Milton will make landfall along the west-central coast of Florida tonight, cross the Florida peninsula overnight and early Thursday, and move off the east coast of Florida over the western Atlantic Ocean on Thursday," the center said. Milton is expected to remain at hurricane strength as it sweeps over the Florida peninsula, before gradually weakening as it moves back out to sea. Fuel supplies, prices tighten Mandatory evacuations for hundreds of thousands of west coast Florida residents led to a fuel shortages in some areas ahead of the storm. The state waived four statutes regulating fuel sales, storage and distribution to shore up supplies and has been escorting fuel trucks to retail stations that have run dry. Prices for Florida CBOB delivered at Tampa and Port Everglades fell by 0.75¢/USG to $2.08/USG today, down from their highest point since mid-August on Monday at $2.18/USG. Cash differentials were stable in the gasoline cargo markets at Argus Gulf coast Colonial CBOB +10¢/USG. Florida ultra-low sulphur diesel (ULSD) delivered to Port Everglades fell by 2.23¢/USG to $2.30/USG today. Cash differentials were unchanged in the waterborne ULSD cargo markets at Argus Gulf coast Colonial ULSD +12.25¢/USG. Milton's storm surge and destructive winds in the Tampa area have the potential to significantly damage a key import hub from which refined products are sent by pipeline to the Orlando area and distributed by truck throughout the state. If terminals at the port are quick to reopen, blocked roads and flooding could prohibit fuel truck deliveries to gas stations that may not even have power. The offshore oil and natural gas hub in the Gulf of Mexico was largely spared as Milton's track took it well south of most platforms. By Stephen Cunningham, Stephanie Crawford, Cooper Sukaly and Nathan Risser Hurricane Milton projected path 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
