Overview
WTI (West Texas Intermediate) and Brent Crude are the two primary global oil benchmarks that together price approximately 70% of the world's traded crude oil.
WTI (West Texas Intermediate)
- Exchange: NYMEX/CME Group (ticker: CL)
- Delivery point: Cushing, Oklahoma โ a landlocked pipeline hub with ~76 million barrels of storage capacity
- API gravity: ~39.6ยฐ (lighter) with ~0.24% sulfur (sweeter)
- Pricing scope: Primarily North American crude โ benchmarks ~70% of U.S. physical crude trades
- Trading volume: ~1.2 million contracts/day (CME, 2023)
Brent Crude
- Exchange: ICE Futures Europe (ticker: B)
- Delivery point: Originally from the Brent field in the North Sea; now a blend of crudes from 5 North Sea fields (Brent, Forties, Oseberg, Ekofisk, Troll โ known as BFOET)
- API gravity: ~38.3ยฐ with ~0.37% sulfur
- Pricing scope: International benchmark โ prices ~60% of global crude oil, especially for Europe, Africa, and Middle East exports
- Trading volume: ~800,000+ contracts/day (ICE, 2023)
The WTI-Brent Spread
The price difference between WTI and Brent is a closely watched indicator of regional supply-demand dynamics:
- Pre-2011: WTI typically traded at a $1-2 premium over Brent due to lighter/sweeter quality
- 2011-2014: U.S. shale oil boom created a pipeline bottleneck at Cushing, pushing WTI to a $20+ discount vs Brent (peaked at โ$27.88 in September 2011)
- Post-2015: Lifting of the U.S. crude export ban (December 2015) gradually narrowed the spread to $3-7
- 2022: Russian sanctions widened the spread as European demand for non-Russian crude (Brent-priced) surged
Why the Spread Matters
- Refiners choose between WTI and Brent-linked crudes based on the spread
- U.S. crude export competitiveness depends on WTI being cheaper than Brent
- The spread reflects infrastructure capacity, shipping costs, and geopolitical risk premiums