Texas Oil Falters in Performance as Benchmark

The mighty Texas crude-oil benchmark — the per-barrel price watched obsessively by the markets and quoted by the media — has diverged so drastically from prices of other grades of crude in recent weeks that some market participants are calling it a “broken benchmark.”

Several factors have combined to push the price of West Texas Intermediate crude oil — used as the basis for the world’s most widely traded energy contract — dollars below other desirable, so-called light sweet crudes.


On Friday, for example, the bellwether oil contract on the New York Mercantile Exchange closed at $63.38 a barrel, nearly 5% less than the $66.49-a-barrel close of North Sea Brent crude, the London benchmark quoted on the ICE Futures exchange.

The disparity, which is partly rooted in structural changes in the energy markets — including how and where oil is produced and shipped — means the standard barrel of oil no longer has a straightforward price.

Dow Jones Newswires