( A good definition of Christmas for a commodities trader goes something like “this thing that costs X over here costs X+Y over there.” Christmas has come way early in Texas. As I wrote here, the spread between crude oil priced in Midland, Texas – the heart of the Permian shale basin – and the international Brent crude benchmark has blown out from about $3.50 a barrel two months ago to almost $14 a barrel, the widest in about three years. The shale boom has run into logistical constraints, forcing an increasing amount of barrels in West Texas to be priced at a discount as they seek alternative (and more expensive) routes to market, such as rail-cars or trucks. The cure for spreads is infrastructure. New pipelines aren’t due to show up until the second half of next year. So that means anyone owning existing infrastructure has […]