It’s one of the main benchmarks used in global oil pricing and can be traded as crude oil futures contracts on the New York Mercantile Exchange (NYMEX). In the United States, both Brent and WTI (West Texas Intermediate) are used as benchmarks for crude oil pricing, but WTI is more commonly referenced for domestic oil prices. WTI is the primary benchmark for oil traded in the U.S. market, particularly in futures contracts. It reflects the prices for oil produced in the U.S., especially from Texas and other nearby regions. However, Brent prices are also relevant for U.S. import prices and can influence WTI due to their interconnectedness in the global oil market. As a result, U.S. oil producers and consumers often pay attention to both benchmarks.

The futures price reflects market expectations for the future value of oil. Oil futures are traded on commodities exchanges, such as the New York Mercantile Exchange (NYMEX) and the Intercontinental Exchange (ICE). These exchanges provide a platform for participants to buy or sell oil futures contracts. Technological developments and changes in resource distributions along the oil supply chain will also impact crude oil spot prices. The increased focus on renewable energy is already accelerating such changes.

What Is West Texas Intermediate (WTI)?

These two factors lead to a price difference between the two termed the ‘spread’ which will change depending on different supply/demand dynamics and geopolitical influences. There has been a trend, due to advancements in oil drilling and fracking, of West Texas Intermediate becoming cheaper than Brent Crude oil. This has been dubbed the American shale revolution, and the increased production led oil prices to fall from above $100 to below $50 from 2014 to 2015. 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. WTI is primarily traded on futures markets, which allows investors to hedge against price fluctuations.

What is West Texas Intermediate (WTI)? Definition and Meaning

But consumers in California or New York may not see the correlations hold so well. Depending on where your fuel comes from, you may actually see fuel prices correlate more closely with Brent crude. This is especially true in coastal markets like the Northeast or the West Coast, which are often importing fuels from overseas or foreign crude for refining. In the Midwest and North Plains of the US, your price might be more linked to crude prices coming from Canada or the Dakotas, with only a portion coming from Texas crude oil. WTI prices are most important for fuel buyers directly supplied by Gulf Coast refineries – including the PADD 3 (Gulf Coast) states and PADD 1C (Southeast) markets. 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.

Oil (WTI) News

Brent is also tied to more worldwide oil markets, meaning that more factors are influencing its price. There are many different types of python math libraries crude oil and crude oil blends in the world, and they’re typically classified according to their capacity to be refined into gasoline. There are two main differences between WTI and Brent, the location from which they are sourced and the quality of the oil.

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She lives on the west coast of Canada, and spends a lot of time walking around looking at trees. A sector once viewed as a classic Trump trade has been left behind by investors this year, but there are several reasons it could soon rally, BofA said. Most WTI production occurs in Texas, particularly in regions like the Permian Basin, but it is also extracted from states such as North Dakota and New Mexico. The oil is transported via pipelines to various refineries across the U.S. Traders often use correlation analysis to identify pairs of assets that have a historical relationship. In the case of WTI, potential pairs could include other energy commodities like natural gas or heating oil.

• In this case, the WTI differs from other crude grades that may be “heavier” (more dense) or “sour” (higher sulfur content).
• As of August 31, 2021, WTI was trading at around $68.50 per barrel, while Brent traded at $72.85.
• The “American Petroleum Institute Gravity” is called the “API Gravity,” a metric that evaluates how light or heavy crude oil is compared to water.

Sulfur content higher than 0.5% is considered sour; lower than 0.5% is considered sweet. Ritika Tiwari is a freelance content writer and strategist at Blueberry, specializing in forex, CFDs, stock markets, and cryptocurrencies. She has over 10 years of experience building content for FinTech and SaaS B2B brands. Daily articles and insights from the fuel markets and natural gas space. At the end of 2010 the price difference between the two benchmarks widened, and then narrowed at the end of 2013.

Whereas, Brent crude oil is produced in the North Sea, primarily in the United Kingdom and Norway. Low inventories may suggest a tight supply and drive prices up, while high inventories can put downward pressure on prices. Economic growth in major economies like the United States, Europe, and China drives demand for oil, which can lead to higher prices. Oil production by non-OPEC countries, such as the United States, Russia, and Canada, also affects global supply and WTI prices. The information contained herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Furthermore, no responsibility is assumed for use of this material and no express or implied warranties or guarantees are made.

What was the price of oil one month ago?

• Both Brent Crude and WTI are light and sweet, making them ideal for refining into gasoline.
• The recent pandemic of 2019 took a toll on almost all sectors of the economy.
• West Texas Intermediate (WTI), also known as Texas Light Sweet on occasion, is a key oil benchmark in the commodities market.
• The oil is considered to be very light, with a low sulfur content – considerably lighter and sweeter than Brent Crude, Dubai, or Oman.
• Higher oil prices can boost profits for oil producers, leading to increased stock valuations.

The oil is considered to be very light, with a low sulfur content – considerably lighter and standard stp account sweeter than Brent Crude, Dubai, or Oman. For example, the price of crude oil and related refined products rose significantly at the beginning of this century due to increased demand in emerging economies. In addition, only a small amount of money was invested in exploratory activities, contributing to the poor supply. 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 for a few).

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. WTI (West Texas Intermediate) and Brent are two major benchmarks for crude oil prices. WTI represents oil extracted in the United States, primarily from wells in Texas, while Brent represents oil extracted from the North Sea, primarily in the United Kingdom. WTI and Brent oil futures are financial contracts that allow participants to speculate on the future price of crude oil.

WTI vs. Brent Crude Oil

WTI is a light, sweet crude oil, which refers to its physical characteristics. As WTI is priced in U.S. dollars, fluctuations in the Dollar’s value can affect the price of oil. A weaker dollar can make crude oil more attractive to foreign buyers, increasing prices. The Organization of the Petroleum Exporting Countries (OPEC) regulates global oil supply significantly. Changes in OPEC production quotas or compliance tickmill review levels can significantly impact WTI prices.

Margin trading involves a high level of risk and is not suitable for everyone. Margin Forex and CFDs are highly leveraged products, which means both gains and losses are magnified. You should only trade in these products if you fully understand the risks involved and can afford to incur losses. When the price difference between the two assets deviates significantly from its historical mean, traders may long the undervalued asset and short the overvalued one. WTI is primarily produced in the United States, specifically in the Permian Basin region of Texas.

Political instability, conflicts, or sanctions in the region can disrupt crude oil production and supply, leading to price spikes. Trades on the NYMEX are typically sold in 1,000 barrel increments (42,000 gallons). Many oil producers also use the NYMEX as a hedging tool to lock in their profits for upcoming years. WTI is one of the most referenced benchmarks used in oil news reports on oil prices, along with the Brent price – which comes from the North Sea. Futures on these major crude oil benchmarks are listed on U.S. and European exchanges.

This article will discuss everything about WTI crude oil and ways to trade it. If you look at the disconnect between the two benchmarks now, and it has narrowed to about $3 – the market has levelled out. The disconnect became very stark at one point – when the US had a domestic glut – now that there is a global glut, there is a convergence of the two benchmarks. Light Sweet Crude Oil futures and options, in particular West Texas Intermediate futures, are the most actively traded energy product in the world. In 2023, the U.S. imported about 8.51 million barrels per day of petroleum products from 86 countries. The same year, it exported about 10.15 million barrels of petroleum to 173 countries and three U.S. territories.