WTI is a grade of crude oil produced from fields in West Texas and Eastern New Mexico. It is also often used to refer to a broad category of light sweet crude oil produced anywhere in the interior of the US.  

Production

True WTI is produced in the Permian and Delaware basins in West Texas and Eastern New Mexico.  Production from this region, after many years of decline, has seen a dramatic increase since 2010 due to the rise of unconventional production (ie "fracking").  WTI is the major grade produced in the region and is a blend from many different fields that is gathered and blended in hubs in and around Midland.  From there it is moved by pipeline to crude hubs at Cushing and on the Gulf Coast. 

At the Cushing crude trading hub, WTI is blended with other light sweet grades from inland production regions such as Western Canada, Bakken, and Niobrara.  from there crude moves on to refineries in the Midwest and to the Gulf Coast.  

WTI is moved directly to the Gulf Coast on a number of pipelines, as well as indirectly through the Cushing hub.  WTI is one of the major crudes processed by Gulf Coast refineries in the Corpus Chisti, Houston and Port Arthur refining centers.  Growing supplies have allowed WTI and other light sweet grades to largely push out crude imports into the Gulf Coast, despite WTI being much lighter and sweeter than most of the Gulf Coast refineries were designed to run.  Gulf Cost refineries are generally running WTI up to light crude processing constraints.

WTI is also exported to the international market in large volumes from export terminals in Corpus Christi and Houston.    WTI moves to the Northwest European market where it competes with other light sweet grades, is accepted as part of the Dated Brent (BFOE) basket of crudes.  WTI also moves directly to the Asia market, increasingly on VLCCs that Gulf Coast ports have been investing to load more efficiently.

WTI market pricing

There are three major locations where WTI prices are quoted:

• Midland - This is the price point closest to the largest production area for  WTI.  It is one of the main gathering point for WTI in West Texas before it is sent by pipeline to the Gulf Coast, Cushing or nearby refineries.  This is generally considered to reflect crude of "true" WTI quality as it only includes crude from West Texas and Eastern New Mexico and has a higher and more consistent quality (40-44 API, 0.2 S) than the light sweet blend in Cushing.

• Cushing - Cushing is an intermediate transportation point where pipeline from many producing regions (West Texas, Canada, Oklahoma, North Dakota) and to multiple refining regions (Gulf Coast and Midwest) meet.  The Cushing blend of light sweet crude is officially called Domestic Sweet Blend (DSW).  However it is often referred to as WT  Cushing.  Generally this blend is of lower quality (38-42 API, 0.42 S) and more variability than Midland WTI.  The Cushing WTI market is the basis for the NYMEX crude futures contract.

• Houston  (Magellan East) - Location on the Gulf Coast where crude arrives by pipeline from Cushing and Midland, and from where it is shipped by pipe to Gulf Coast refiners or exported by tanker to the international market.  WTI blends in Houston are also called MEH.  Price quotes in Houston are generally of the specification as for Midland.

• Northwest Europe - Increasingly, delivered barrels of WTI are forming the basis for the Dated Brent prices quote in Northwest Europe. CIF barrels of WTI (from Midland only) are included in the Platts Dated Brent quote, with a location adjustment to put them on an "FOB North Sea" equivalent basis.