WTI, the US oil benchmark and the price used for the NYMEX futures market is diminishing in importance in the global oil market. Its market share is now down to 10% from 20% in 2008. Brent has increased from 45% to 53% while the Dubai benchmark is now at 31% of all oil priced.
The Saudis have set up a new sour crude benchmark with ARGUS and have gained a 4% market share. This an important global development for futures markets and is one of the reasons the CME Group has doubled its stake in the Dubai Mercantile Exchange.
The spread in WTI/brent is more volatile for the simple reason that WTI is local price and Brent is more of a global benchmark. Overtime, the WTI contract will have to change to reflect global demand or there will be a decrease in its usage and viability as a futures contract.
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