What are WTI Midland Futures?
WTI Midland futures are financial contracts that allow participants to buy or sell a specified quantity of WTI Midland crude oil at a predetermined price on a future date. These contracts serve as essential tools for managing risk and capitalizing on market opportunities, providing exposure to the unique characteristics of WTI Midland crude.
Prices of WTI Midland futures are intimately connected to the dynamics of the WTI crude oil market, with distinct regional considerations. Economic indicators, geopolitical events, and supply-demand fundamentals all contribute to the price movements of WTI Midland futures, and traders utilize these contracts to navigate and respond to market forces.
What is WTI Midland?
WTI Midland represents unblended WTI crude directly from the Permian Basin to Cushing, Oklahoma. It is considered a purer form of WTI, distinct from blended crudes that may result from the mixing of different oil streams at Cushing. Recent market trends show a premium for WTI Midland over NYMEX Crude, reflecting concerns about blending at Cushing and the desire for a more assured quality of crude.
What is the Difference Between WTI and WTI Midland?
The key distinction lies in the purity of the crude. WTI Midland is unblended, offering a more direct and reliable supply from the Permian Basin. In contrast, WTI may include blended crudes meeting NYMEX specifications, introducing an element of uncertainty about the specific grade.