When WTI crude oil prices turned negative for the first time in history, it caused chaos in the industry. The problem occurred in Cushing, Oklahoma (and it will only happen here), which is the delivery point for WTI crude. When there were more sellers than buyers, the storage facility became full and because of lockdown measures there were no trucks to take the oil anywhere else to relieve the pressure. Still, the unprecedented event has attracted scrutiny and even raised questions about the viability of some international oil benchmarks. Ever since that day on April 20, when US crude futures collapsed and prices turned to a negative $40 per barrel, the US oil market has been looking for an alternative to Cushing. Last week news emerged that oil pricing agencies (PRA) will launch new US crude benchmarks to reflect the price of Gulf Coast-traded crude on tankers, a break from the old landlocked system. This represents a potential challenge to Cushing. US crude oil continues to trade from the US Gulf Coast and it reflects prices for oil at Cushing storage facilities. All of this will continue to be quoted as a premium or discount to WTI on the NYMEX futures exchange. While the impact on the oil price reporting agencies (PRA) is tangible, it is questionable whether these agencies impact the futures markets. PRAs will continue to publish prices for physical oil only as their role is to provide daily price assessments to buy and sell physical crude. The ultimate question remains how will traders and speculators hedge on these new US crude benchmarks? Technically traders will now have the option of using a new benchmark that will represent the crude quality of the US Gulf Coast medium sour crude grades. Meanwhile the WTI platform will trade the light sweet crude that not only represents the WTI Midland crude but also the abundance of US shale. Also, it is worth remembering that other exchanges, such as the Intercontinental Exchange “ICE” and CME Group, launched futures contracts deliverable at terminals in Houston in 2018. But this did not succeed in establishing a benchmark that reflects the export trade, and volumes have been muted compared to WTI delivered to Cushing. This dilemma may keep the oil futures market in the US torn between the landlocked WTI that failed to represent the economics of crude oil in this market and the other newly introduced benchmarks that still need time. The dichotomy between the physical and futures market is likely to increase. Perhaps what we need to see is not another benchmark but rather all market participants work simultaneously on both the futures and physical markets. • Faisal Faeq is an energy and oil marketing adviser. He was formerly with OPEC and Saudi Aramco. Twitter:@faisalfaeq Disclaimer: Views expressed by writers in this section are their own and do not necessarily reflect Arab News" point-of-view