The shale revolution has now come in the forefront having a decisive impact on WTI crude oil prices rather than elasticity of WTI to Brent which has dropped in half in the past four years.Now a 1% increase in the price of Brent Crude would result in an increase of 35 bps in wTI crude compared to 78 bps rise four years ago.

However, unlike natural gas, WTI crude oil is connected to Brent Crude but only its elasticity has dropped, according to a report by Bank of America-Merrill Lynch (BofAML).

WTI prices is now mostly a function of domestic crude oil prices North and South of Cushing. Light Louisiana Sweet and Bakken oil have become the most important drivers of WTI pricing in the last couple of years.

In recent months, WTI prices have rallied to $101.50 a barrel suggesting that tightness is prevailing in Cushing.Oil supply, measured as a function of local production and pipeline inflow capacity, outpaced demand, a function of refinery and pipeline take up capacity, bay an average of 470,000 barrels per day in the past three years.

"Yet our updated regional supply and demand balance table reflects tighter crude oil balances in Oklahoma in the past quarter, with demand or take up capacity finally outstripping supply. On a forward basis, this situation should persist until (or unless) the Keystone XL pipeline is finally built in 2016 or 2017, BofAML report said.
Source: Bank of America-Merrill Lynch (BofAML)