Brent Crude is the biggest of the many major classifications of oil consisting of Brent Crude, Brent Sweet Light Crude, Oseberg, Ecofisk and Forties. Brent Crude is sourced from the North Sea. The Brent Crude oil marker is also known as Brent Blend, London Brent and Brent petroleum. It is used to price two thirds of the world's internationally traded crude oil supplies.
The other well-known classifications (also called references or benchmarks) are the OPEC Reference Basket, Dubai Crude and West Texas Intermediate (WTI).
The name "Brent" comes from the naming policy of Shell UK Exploration and Production, operating on behalf of Exxon and Shell, which originally named all of its fields after birds (in this case the Brent Goose).
Oil production from Europe, Africa and the Middle East flowing West tends to be priced relative to this oil, i.e. it forms a benchmark. However, large parts of Europe now receive their oil from the former Soviet Union, especially through Russia.
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Characteristics
Brent blend is a light crude oil, though not as light as WTI. It contains approximately 0.37% of sulphur, classifying it as sweet crude, yet again not as sweet as WTI. Brent is ideal for production of gasoline and middle distillates. It is typically refined in Northwest Europe, but when the market prices are favorable for export, it can be refined also in the East or Gulf coasts of the United States or in the Mediterranean region.
Brent Crude has an API gravity of around 38.06 and a specific gravity of around 0.835.
Trading
The symbol for Brent crude is LCO. It was originally traded on the open-outcry International Petroleum Exchange in London, but since 2005 has been traded on the electronic IntercontinentalExchange, known as ICE. One contract equals 1,000 barrels (160 m3). Contracts are quoted in U.S. dollars, therefore each tick lost or gained equals $10.
Pricing
Typical price difference per barrel is between +/-3 USD/bbl compared to WTI and OPEC Basket. The different price spreads are based on physical variations in supply and demand (short term). The depletion of the North Sea oil fields is one explanation for the divergence in forward prices.
Delivery dates
In addition to the IntercontinentalExchange, Brent crude futures are also traded on the NYMEX and have delivery dates in all 12 months of the year.[1]
See also
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- List of crude oil products
- ETF Securities
- Iranian oil bourse
- Petrobourse
- Petrodollar warfare
- Petroeuro
- Petroleum classification
References
External links
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