The most obvious is the price of the American oil benchmark, West Texas Intermediate (WTI).
Over the last few months, I profitably traded the spread between West Texas Intermediate and Brent.
Since inventories were building up at Cushing, the price of West Texas Intermediate was artificially depressed.
The ETF purports to track the price of West Texas intermediate crude oil.
West Texas Intermediate crude and ICE Brent crude are both priced in dollars.
The diversion of oil from the Midwest will narrow the gap between the West Texas Intermediate Oil and the Brent Crude.
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Cushing is the price settlement point for West Texas Intermediate Sweet Crude Oil on the New York Mercantile Exchange (NYMEX).
Indeed, Brent has gained in dominance in recent years as investors have moved away from West Texas Intermediate, the U.S. crude oil benchmark.
West Texas Intermediate crude, the U.S. benchmark fuel, remained largely flat between January 20 and Friday, when the most recent survey was conducted.
The oil, from producers in western Canada, is gooey, acidic and high in sulfur--harder to refine than benchmark West Texas Intermediate (light, sweet) crude.
But now, the rioting has spread to Libya and Iran, and the prices of Brent Crude, and West Texas Intermediate Oil have jumped upward.
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Bakken crude even trades at a discount to West Texas Intermediate (WTI), the benchmark oil for the US set by prices in Cushing, Oklahoma.
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In November, a pipeline deal was announced between Enbridge and Enterprise Products Partners, causing West Texas Intermediate (WTI) oil prices to jump.
While has traded upward, West Texas Intermediate (WTI) is much cheaper.
The price signal at issue is the way that the WTI (West Texas Intermediate) oil price benchmark has diverged so greatly from the other three, Mars, LLS and Brent.
The price spread between Brent crude oil, the European benchmark and West Texas Intermediate crude oil, the U.S. benchmark, widened sharply because of the loss of Libyan crude oil production.
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As you can see in the chart below, over the past 5-, 15- and 30-year cycles, West Texas Intermediate crude oil prices head higher in March, and have generally continued to climb through September.
If ExxonMobil is looking at a shortage of sweet-light in its mid-western refineries, they can go to the futures market and buy a few weeks supply of West Texas Intermediate (WTI) for delivery in 60 days.
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It's looked not only at Brent crude but at some other exotic hydrocarbon cocktails - West Texas Intermediate, the Argus Sour Crude Index, Brent Blend or BFOE (the basket of the North Sea's Brent, Forties, Oseberg and Ekofisk), Dubai and Oman, Tapis and Minas, and East Siberia-Pacific Ocean Blend.
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