Friday, October 30, 2009

Saudi Arabia to Drop West Texas Intermediate as Benchmark for U.S. and North American Crude Oil Pricing

This is more evidence that America's dominance in the world is fading as Saudi Aramco will drop the light U.S. crude oil that has dominated North American oil trading for decades. The mega oil company will replace the West Texas Intermediate with the Argus Sour Crude Index.

The WTI price measure has dominated North American oil trading – and conversation – for decades. It is based on oil sales in Cushing, Okla., and is one of two globally watched markers of crude. The other is Brent, which is based on sales in the North Sea...

Although Argus is also a U.S. price, it is more closely linked with international oil and is seen as a more reliable indicator of global oil prices...

“North American oil demand has peaked,” he said. “What this really says is that whereas WTI in the past had been a premium price, now WTI is going to be a discount price.”

Source: Global Investor

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