Brent Crude vs West Texas Intermediate WTI: The Differences

WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media. The market for crude is incredibly diverse, with the quality and original location of the oil making a major impact on price. Because they’re relatively stable, most crude oil prices worldwide are pegged to the Brent, WTI, or Dubai benchmarks. West Texas Intermediate (WTI), also known as Texas Light Sweet on occasion, is a key oil benchmark in the commodities market.

From a transportation standpoint, oil extracted at sea has certain advantages over land-based supplies, which depend on the capacity of pipelines. The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons. At some of its worst moments, the price spread between Brent and WTI reached as high as $8 per barrel. There are actually a variety of factors that we use to differentiate between them, such as the API gravity (the measurement of an oil’s density relative to water).

Brent Crude and West Texas Intermediate (WTI): Oil Benchmarks

1. The Dubai benchmark is the main reference for Persian Gulf oil delivered to the Asian market.
2. I fully expect crude prices to march higher throughout the rest of the year, if not the decade.
3. The oil travels via pipeline from Texas to refineries in the Midwest and the Gulf of Mexico.
4. West Texas Intermediate (WTI) is a grade or mix of crude oil; the term is also used to refer to the spot price, the futures price, or assessed price for that oil.
5. The chart tracks the price of a barrel of WTI crude oil over a selected period.

West Texas Intermediate plays an important role in managing risk in the energy sector worldwide as it has high liquidity, a large number of customers, and a lot of alpari review transparency. Furthermore, transporting WTI overseas to Brent crude’s market can be costly, making it difficult for WTI to compete with Brent crude in terms of pricing.

Eurozone PMI sounds the alarm about growth once more

West Texas Intermediate (WTI) is a grade of crude oil and one of the main three benchmarks in oil pricing, along with Brent and Dubai Crude. WTI has an API gravity of about 39.6, making it quite light (having an API gravity over 10 means the petroleum is lighter and floats on water). WTI is valued as light oil, similar to Brent, but it doesn’t have the same worldwide reach. One factor contributing to this is that the United States generally forbids crude oil export (except forex analysis and forecast for a few). WTI is produced in landlocked regions and must be transported to the coast, where most refineries are situated, another significant factor contributing to its low value. The standard and eventual uses of oil drilling depend heavily on the field they come from; therefore, oil is traded using benchmarks.

Crude Oil Prices: West Texas Intermediate (WTI) – Cushing, Oklahoma (DCOILWTICO)

The chart tracks the price of a barrel of WTI crude oil over a selected period. The x-axis represents time, and the y-axis represents US dollar prices per barrel. With only 0.24 percent sulfur, WTI crude oil qualifies as « sweet » and has an « API Gravity » of 39.6 degrees, making it a « light » crude oil.

When refiners purchase a Brent contract, they have a strong idea of how good the oil will be and where it will come from. Today, much of the global trading takes place on the futures market, with each contract tied to a certain category of oil. Open a newspaper and there’s a good chance you’ll find a news story about the price of oil going in one direction or the other.

West Texas Intermediate

These allow oil traders to identify the oil being exchanged immediately (and ultimately delivered). In addition, it enjoys high confidence because of its high grade and the potential for simple processing or refinement of the crude. Brent is the reference for about 80% of the oil traded around the world, with WTI the dominant How to buy aioz benchmark in the U.S. and Dubai influential in the Asian market. Brent Crude is the benchmark used for the light oil market in Europe, Africa, and the Middle East, originating from oil fields in the North Sea between the Shetland Islands and Norway.