A new market for light sweet crude has started up in the Houston area, as more pipeline connections open up from the Permian basin in west Texas. WTI crude has been trading at Magellan’s East Houston terminal since early December, after the start-up of Plains’ 250,000 b/d Sunrise pipeline enabled more light sweet Permian production to reach the Houston area. Many of the bids, offers and deals were initially done at differentials to Gulf coast light sweet marker LLS. But the pricing basis shifted to the WTI Cushing benchmark on 18 December, and trade is becoming more regular. The most recent deal took place on 6 January at a $1/bl discount to WTI Cushing, although bids and offers have risen slightly against the benchmark since then.
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