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West Texas Intermediate

 
Investment Dictionary: West Texas Intermediate - WTI

Light, sweet crude oil commonly referred to as "oil" in the Western world. WTI is the underlying commodity of the New York Merchantile Exchange's oil futures contracts.

Investopedia Says:
WTI is considered a "sweet" crude because it is about 0.24% sulfur, a higher concentration than North Sea Brent crude. WTI is high quality oil that is easily refined.

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Wikipedia: West Texas Intermediate
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Medium-term price of oil

West Texas Intermediate (WTI), also known as Texas Light Sweet, is a type of crude oil used as a benchmark in oil pricing and the underlying commodity of New York Mercantile Exchange's oil futures contracts.

This oil type is often referenced in North American news reports about oil prices, alongside North Sea Brent Crude. Other important oil markers include the Dubai Crude and the OPEC Reference Basket.

Contents

Characteristics

WTI is a light crude, lighter than Brent crude. It contains about 0.24% sulfur, rating it a sweet crude, again sweeter than Brent. Its properties and production site make it ideal for being refined in the United States, mostly in the Midwest and Gulf Coast regions.

WTI has an API gravity of around 39.6 (specific gravity of around 0.827).

Pricing

Historical price data for WTI can be found at a website maintained by Energy Information Administration, Department of Energy. It is listed as WTI, Cushing, Oklahoma [2].

Typical price difference per barrel is about $1 more than Brent, and $2 more than OPEC basket.

Anomaly in 2007

Although WTI is expected to command a higher price than Brent crude, on May 24 2007, it was priced at $63.58 per barrel as against $71.39 per barrel for Brent (Bloomberg). The change in price differential may have been due to a temporary shortage of refining capacity; on April 13, WTI Crude at Cushing may have temporarily lost its status as a gauge of world oil prices[1]. A large stockpile of oil at the Cushing, Oklahoma storage and pricing facility (mainly due to a refinery shutdown[2]) caused prices to be artificially depressed at the Cushing pricing point. As stockpiles reduced, the WTI price increased to exceed Brent once again. [3]

Historical data

Historical monthly price data back to 1946, can be obtained from economagic.[4]

See also

References


 
 

 

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