It contains approximately 0.24% of sulphur which means it is a ‘light’ crude oil. The extraction of WTI crude oil is completed exclusively in North America. Its production sites and its properties therefore make it ideal for refining in the United States. This refinery is mostly completed in the Midwest and the Gulf Coast areas. It should also be noted that the API gravity of WTI (West Texas Intermediate) is around 39.6° and its specific density is 0.827.
For example, you can see that Brent crude oil spot prices are quoted by the barrel (bbl), as are West Texas Intermediate (WTI) oil prices on global futures exchanges like NYMEX. Brent crude oil trades six days a week, so based on which day you’re looking at crude oil spot prices, you may be getting the last recorded live price. At local time on Sundays for your chosen exchange, you’ll almost certainly get the last Brent crude oil spot price that the market closed with. West Texas Intermediate, more generally represented by the initials WTI, is also sometimes called Texas Light Sweet by certain brokers. It is actually a type of crude oil used by the economists as a standard value to determine the crude oil price as a commodity on the exchange markets, within the framework of futures contracts. This quotation is priced on the New York Mercantile Exchange, which is the principal world commodities exchange.
- There has been a trend, due to advancements in oil drilling and fracking, of West Texas Intermediate becoming cheaper than Brent Crude oil.
- It should also be noted that the API gravity of WTI (West Texas Intermediate) is around 39.6° and its specific density is 0.827.
- It is traded in U.S. dollars, and it trades on exchanges in New York, London, and Singapore.
- Then, in late 2011, the Iranian government threatened to close the Straits of Hormuz, through which approximately 20% of the world’s oil flows.
- It is actually a type of crude oil used by the economists as a standard value to determine the crude oil price as a commodity on the exchange markets, within the framework of futures contracts.
- Erika Rasure is globally-recognized as a leading consumer economics subject matter expert, researcher, and educator.
Both benchmark oils are considered sweet, but WTI is sweeter making it a bit easier to refine. The significance of a benchmark in the oil market is that benchmarks serve as a reference price for buyers and sellers of crude oil. Oil benchmarks are frequently quoted in the media as the price of oil. Though Brent crude and WTI crude are the most popular benchmarks, their prices are often contrasted.
Around the time that the Arab Spring (an uprising across much of the Arabic region) began in Egypt in February of 2011, the spread widened. Many energy analysts predict that oil could soon touch $100 a barrel, even as electric cars become more popular and the coronavirus pandemic persists. Exxon Mobil and other oil companies that only a year ago were considered endangered dinosaurs by some Wall Street analysts are thriving, raking in their biggest profits in years. The price of WTI is quoted on the NYMEX, or New York Mercantile Exchange, which is the American market where all the commodities are quoted.
When trading online, investors often have the choice between different asset types according to the production zone of this commodity. The most available oil on the markets is called WTI which stands for ‘West Texas Intermediate’. In order to best anticipate the movements and evolution of its prices through CFDs, it is therefore necessary to know their specificities and main characteristics.
Brent Crude and West Texas Intermediate (WTI): Oil Benchmarks
The price of oil is a major factor in the overall health of the energy sector and is one of the most heavily traded commodities as it is influenced by almost every global, macro event. In the United States, West Texas Intermediate is the preferred measure and pricing model. As of August 31, 2021, WTI was trading at around $68.50 per barrel, while Brent traded at $72.85. But all geopolitical current events in connection with oil production also influence the WTI prices.
The Two Most Prevalent Grades of Crude Oil
Oil prices are customarily quoted in dollars (USD) around the world, not only in the US or when referring to US crude oil. There are three major types of crude oil throughout the world that are used as oil reference prices according to their production zones. Therefore, for European oil, Brent from the North Sea acts as the reference, whereas for the OPEC countries, it is the Dubai crude which is referred to for the price determination. The oil is considered to be very light, with a low sulfur content – considerably lighter and sweeter than Brent Crude, Dubai, or Oman.
Furthermore, transporting WTI overseas to Brent crude’s market could come at a cost that would make WTI unable to compete with Brent crude in terms of pricing. WTI is the underlying commodity of the New York Mercantile Exchange’s (NYMEX) oil futures contract and is considered a high-quality oil that is easily refined. The sulfur content of both Brent and WTI is well under 1%, making them both “sweet.” https://www.forexbox.info/what-to-know-about-financial-advisor-fees-and/ These types are also less dense (“lighter”) than many of the crude oils extracted elsewhere. Both of these characteristics make them easier to refine and more attractive to petroleum product producers. Brent crude’s price is the benchmark for African, European, and Middle Eastern crude oil. The pricing mechanism for Brent dictates the value of roughly two-thirds of the world’s crude oil production.
Therefore, Brent prices moved lower by virtue of hints of more Iranian crude, and WTI strengthened because of less U.S. production and increasing exports. It is important to notice that mere anticipation of an influx of oil into the market was enough to cause price fluctuations. Political shifts, weather events, and global health crises have been some of the biggest shock factors in the oil market.
Where is Brent crude oil refined?
The increased focus on renewable energy is already accelerating such changes. That’s down by 1.85% from the price of $82.72 per barrel one week ago. If you check live prices on Saturdays, you will always see the last recorded WTI crude price from the previous Friday. West Texas Intermediate (WTI) crude convert australian dollars oil is a specific grade of crude oil and one of the main three benchmarks in oil pricing, along with Brent and Dubai Crude. WTI is known as a light sweet oil because it contains less than 0.50% sulfur (normally about 0.24% to 0.34%), making it “sweet,” and has a low density making it “light.”
Brent Crude vs. West Texas Intermediate (WTI): The Differences
Leveraged trading in foreign currency or off-exchange products on margin carries significant risk and may not be suitable for all investors. We advise you to carefully consider whether trading is appropriate for you based on your personal circumstances. We recommend that you seek independent advice and ensure you fully understand the risks involved before trading. Because the standard and eventual uses of oil being drilled depends heavily on the field it comes from, oil is traded in benchmarks.
ICE Brent Crude is a specific futures contract offered by Intercontinental Exchange (ICE). It is traded in U.S. dollars, and it trades on exchanges in New York, London, and Singapore. Today’s WTI crude oil spot price of $81.19 per barrel is down 1.85% compared to one week ago at $82.72 per barrel. Today’s Brent crude oil spot price is at $85.75 per barrel, down by 0.03% from the previous trading day. In comparison to one week ago ($87.34 per barrel), Brent oil is down 1.82%.
Oil prices are typically quoted per barrel — this is the same for the Brent crude oil spot price. WTI is the underlying commodity of Chicago Mercantile Exchange’s oil futures contracts (legally binding agreements to buy/sell https://www.forex-world.net/blog/what-is-msci-index-msci-what-does-it-stand-for-and/ a commodity at a specific month at a pre-determined price). Crude oil flows “inbound to Cushing from all directions and outbound through dozens of pipelines”.[16] It is in Payne County, Oklahoma, United States.
First, an agreement with Iran was struck, allowing the country to export more oil, which should have increased the amount of Iranian crude flowing into the market on a daily basis. Since Brent is the pricing benchmark for Iranian crude, that development depressed the price of Brent at the time. The most heavily traded grades are Brent North Sea crude (commonly known as “Brent crude”) and West Texas Intermediate (commonly known as “WTI”). Brent is oil that is produced in the Brent oil fields and other sites in the North Sea. An easy way to get breaking news about the crude oil market is to create a Google Alert which will email you top news stories about oil as they occur. This guide explains exactly what the oil spot price represents and what factors determine the constantly moving live price.