Name: The emergence of a global crude benchmark
Brand: Wood Mackenzie
SKU: 105202
Price: 950 USD
Availability: OnlineOnly
Author: Wood Mackenzie

Insight 25 February 2019

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Report summary

US crude exports are poised to continue a precipitous rise in coming years – and now have a financial futures contract to price against. With the CME group launching a Houston futures contract in late 2018, an emergence of a new global crude benchmark could be imminent. In this joint paper written with CME group we explore: • The mechanics of the contract – delivery and hedging economics • Logistical connections, forecast pipeline flows and liquidity in the Houston market • Outlook for US crude exports and pricing in the global market • Houston market hub vs. other major Texas coastal export hubs

US crude export dynamics: past and present
Opening of the flood gates
Infrastructure scramble
Coastal pricing emergence
Houston WTI pricing relative to other global benchmarks
CME Group’s NYMEX Houston delivery contract specifics
CME Auction Platform
Anatomy of the WTI Houston market
Hedging alternatives
Outlook for US crude exports
Future coastal crude infrastructure development and export hub competition

Tables and charts

This report includes the following images and tables:

Brent-WTI differential ($/bbl)US crude exports by destination region (kb/d)US light sweet crude exports by coastal hub (kb/d)

Texas coastal hub estimated export capacity (kb/d)Houston light sweet crude liquidity by source (kb/d)NYMEX WTI Houston Crude Oil Futures (Daily Volumes and Open Interest)Houston Area crude logistics and CME Group delivery pointsTable 1Forecast of US crude export volumes by end region (kb/d)Forecast of Enterprise Products Partners Houston area export terminal volumesForecast of Export hub volumes (kb/d)