Please read the Risk Disclosure Statement for Futures and Options prior to trading futures products. A surge of WTI production has led many traders to consider it an important pricing benchmark vs. Brent, if not even close to difference between data and insights the total production of the latter. But all geopolitical current events in connection with oil production also influence the WTI prices. Several indicators are taken into account in the price calculation of the WTI barrel.
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. WTI crude oil is a specific grade of crude oil and one of the main three benchmarks in oil pricing, along with Brent and Dubai Crude. It is one of the highest-quality oil, produced mainly in Texas, US.
- Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.
- It is possible to consult the WTI historical prices on the Energy Information Administration website of the department of energy.
- Other reference oil types include Leona, Tijuana, Alaska North Slope, Zueitina or Urals.
Its banking subsidiary, Charles Schwab Bank, SSB (member FDIC and an Equal Housing Lender), provides deposit and lending services and products. Access to Electronic Services may be limited or unavailable during periods of peak demand, market volatility, systems upgrade, maintenance, or for other reasons. Brent Crude is more ubiquitous, and most oil is priced using Brent Crude as the benchmark, akin to two-thirds of all oil pricing. Brent Crude is produced near the sea, so transportation costs are significantly lower. In contrast, West Texas Intermediate is produced in landlocked areas, making transportation costs more onerous. Also, WTI contains a meager amount of sulfur, making it easier to refine.
The spot price reached $126.65 in April that year, while WTI was priced at $112.79. Discover two of the most popular oil benchmarks in the world – Brent crude and West Texas Intermediate. Here, you’ll learn about the differences between them, and find out how to start trading oil.
News for Oil (Brent)MORE
The American Petroleum Institute (API) released the US Weekly Crude Oil Stock data on Tuesday for the week ending January 26, showing a decrease of 2.50 million barrels. This marks a larger decline than the expected decrease of 0.867 million barrels, and it’s an improvement from the previous week’s decline of 6.674 million barrels. The Energy Information Administration (EIA) is anticipated to release improved Crude Oil Stocks Change figures on Wednesday. In addition to the oil market indicators, market participants will closely watch the Federal Reserve’s (Fed) activities for further insights into the US economic landscape. WTI crude oil’s spot price was at $70.40 per barrel one month ago. Compared to today’s price of $76.28 per barrel, the price is up by 8.35%.
What is West Texas Intermediate (WTI)? Definition and Meaning
Location, delivery logistics, and global supply and demand also play a part in oil trading. There has been a trend, due to advancements in oil drilling and fracking, of West Texas Intermediate becoming cheaper than Brent Crude oil. Prior to this, Brent Crude tended to be cheaper than West Texas Crude. 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.
The standard oil density measurement is based on American Petroleum Institute (API) gravity. With numbers falling between 10 and 70, the lighter the oil, the higher the API gravity number. For example, oils in the high API gravity range—light oils—often are light enough to float on water and are easier to refine. Heavy oils in the lower range of API gravity scores will sink in water. Another factor that can lead to significant differences between Brent Crude and West Texas Intermediate is geopolitical trouble. During times of crisis, the spread blows out as political uncertainty leads to surges in Brent Crude prices.
What is ‘West Texas Intermediate’?
While both are considered light sweet crude, they do have different trading volumes depending on each commodity’s futures contract months. And even though both trade on U.S. exchanges and their prices are correlated, meaning they tend to move together, https://traderoom.info/ there are times when WTI is more expensive than Brent and vice versa. Crude oil is a major factor in markets and industries worldwide, so financial news outlets and traders across the globe closely monitor the rise and fall of crude oil futures.
The types of crude oil come from regions as diverse as Alaska North Lope, Arab Light or Zueitina in Libya. For the purposes of trading on futures exchanges in London or New York, however, reference oils are used. These are standardised products used to determine the prices for all other types. The reference oil traded most frequently and of major significance for the USA is West Texas Intermediate (WTI), while the most important in Asia is Dubai Fateh. Other reference oil types include Leona, Tijuana, Alaska North Slope, Zueitina or Urals.
West Texas Intermediate (WTI): Definition and Use as a Benchmark
Global oil supplies are more than adequate right now, and idle excess global production capacity is actually quite high as well. That’s down by 1.31% from the price of $77.29 per barrel one week ago. WTI crude oil trades from Sunday through to Friday, 5 PM to 4 PM CT. If you check live prices on Saturdays, you will always see the last recorded WTI crude price from the previous Friday. Though there are some correlations in composition and usage, all crude oils are not priced equally.
What Is West Texas Intermediate (WTI)?
WTI is not the most commonly used benchmark globally, that honor goes to Brent, where two-thirds of oil contracts globally use Brent as a benchmark. Both, however, are considered high-quality oils and are therefore the two most important oil benchmarks in the world. As mentioned, WTI has a sulfur content between 0.24% and 0.34%, whereas Brent has a sulfur content between 0.35% to 0.40%. The lower the sulfur content of an oil, the easier it is to refine, making it more attractive. Both benchmark oils are considered sweet, but WTI is sweeter making it a bit easier to refine.
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. 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. That means that it has a low density and low sulphur content, making it easy to refine. It is the second-most-traded oil benchmark, behind Brent crude, and is traded on the New York Mercantile Exchange. WTI stands for West Texas Intermediate (occasionally called Texas Light Sweet), an oil benchmark that is central to commodities trading. It is one of the three major oil benchmarks used in trading, the others being Brent crude and Dubai/Oman.
