OIL AND GAS:
Crude-pricing benchmark may follow pipeline to Houston
HOUSTON -- West Texas Intermediate oil's 30-year reign as the benchmark for setting prices for North American crude grades could be coming to an end.
The WTI contract with the New York Mercantile Exchange for trading in light sweet crude goes back to March 1983. Cushing, Okla., was designated as the price settlement point since traders had already converged around the city's massive storage facilities as a market mover after the U.S. government lifted oil price controls in 1981.
Cushing's storage capacity has grown exponentially over the past decade to absorb rising imports. But that growth has hit a ceiling as sellers struggle to move crude from storage tanks to customers.
Meanwhile, the oil industry is moving to develop the Houston Ship Channel as the future center for U.S. oil trading.
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