Move away from West Texas Intermediate?

The Financial Times has reported indications that oil traders are moving away from West Texas Intermediate as a benchmark price for some oil deals. The paper said that increasing oil inventories in Cushing, Okla., are depressing the West Texas Intermediate price relative to other oil benchmarks such as North Sea Brent crude.

Traders want to use a price index that reflects the fundamentals of the global oil market.

The International Energy Authority reported Jan. 16 that “weak global refinery demand and an increasing crude overhang have pressured Brent futures to currently around $45 per barrel, while WTI was at $35 per barrel, distorted by record-high Cushing stocks.”

On Jan. 21 West Texas Intermediate had risen to $42 per barrel, while Brent crude was priced again at $45 per barrel.

—Alan Bailey