Higher Permian production, constrained infrastructure increase spread between WTI oil hubs

Increasing production of crude oil in the Permian Basin in western Texas has outpaced pipeline infrastructure to move the crude to refineries, causing prices for crude in the Permian (at Midland, Texas) to fall below similar crudes priced at Cushing, Oklahoma. While the price difference between Midland and Cushing has been increasing for almost a year, recent refinery outages in the region caused it to widen substantially. Several infrastructure projects that will allow more crude to flow from the Permian to the U.S. Gulf Coast are expected to come online soon, which should cause this price difference to narrow.