Why is the price of CLUSDT lower than WTI, and the price of BZUSDT lower than Brent?

The current deviation is around one dollar.

This time I reduced my position when it reached 85 dollars, cutting a total of 75% of my position, and I currently still hold 25% of the position. All the margin has been moved out, so I might close the position at any time. In fact, the third round of shorting WTI has already been completed, and the profit has already been realized. How much can be earned from the remaining 25% is not a big issue anymore; it is certain that there will be no loss.

I have also started preparing for the fourth round of shorting, still starting from WTI at 90 dollars and Brent at 94 dollars. Whether I can catch it is still uncertain, but as long as it dares to rise, I will dare to short.

I noticed some friends messaged asking why there is a price difference between Binance's CLUSDT and WTI, and also between BZUSDT and Brent. Let me briefly explain the reason.

Because traditional crude oil futures have an expiration date, while perpetual contracts do not have one, Binance needs to use a continuous index to gradually shift from near-month contracts to far-month contracts. This mechanism is called Goldman Roll, and the index price is calculated using a weighted average of the near-month and far-month contracts within a rolling window.

The formula is roughly: Index Price = Near-Month Contract Weight × Near-Month Price + Far-Month Contract Weight × Far-Month Price

So now CLUSDT and BZUSDT are about one dollar lower compared to WTI and Brent, which is very likely because Binance's index has already started shifting from near-month contracts to far-month contracts, while the current crude oil term structure shows that near-month prices are higher than far-month prices.

For a simple example:

The current price of WTI seen on TradingView is 88.5 dollars,

and the contract for next month is 87 dollars. Therefore, if Binance's index has already shifted part of its weight to next month, CLUSDT might display around 87.5 dollars. This is the price difference caused by the inconsistency in contract months.

BZUSDT is the same.

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