Talk to Me Like I'm Stupid: The Price of Oil

So, with thanks to our own Ta-Nehisi Coates, who uses the Talk to Me Like I'm Stupid formulation so well and gave his blessing to me copping his series, I have a question for our The Atlantic community.

We tend to think of "the price of oil" as one thing. Oil is traded in a global market and so it rises and falls roughly in sync across the world, government subsidies aside. When we say, "the price of oil rose over $100 a barrel," we know there are some more details tucked in that assertion, but we don't really pay attention. If you look up the price of oil, you see three prices for a barrel of oil: NYMEX futures, Dated Brent Spot, and WTI Cushing Spot. Usually, the price people give is the Brent spot price, which is for delivery in Scotland, or Cushing, which is for delivery in Oklahoma. At least that's how I understood it, but it didn't seem to matter.

Now it does.

Historically, the Brent and Cushing prices track each other. But something's going on and they have maintained a pretty wide spread for months. On Monday afternoon, the Brent price was $117 a barrel and the WTI price was $95 a barrel. This has been going on for a long time. What's going on here? I've seen several explanations, but I don't know how to weight the various factors. So, talk to me like I'm stupid. What's going on with oil prices, particularly this weird spread between these prices?

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