As of 9 a.m. ET today, West Texas Intermediate (WTI) futures traded at $81.44 per barrel, reflecting a 10.89% increase year to date. Brent crude futures were priced at approximately $84.91 per barrel, marking a 0.18% decline over the last 24 hours but showing a 7.40% increase since the beginning of the year.
Historical Price Movements
WTI prices have seen fluctuations in 2024 but are up 14.05% over the past three years. The lowest point in the past 52 weeks for WTI was $66.97 per barrel on June 28, 2023, while the highest was $95.52 on September 27, 2023, representing a 14.74% drop from the current futures price.
Similarly, Brent crude oil hit a 52-week low of $71.75 per barrel on June 28, 2023, and a high of $96.62 on September 27, 2023, a 12.12% decrease from today’s price.
Market Influences
Both WTI and Brent crude prices are influenced by similar supply and demand factors. Historical price charts for Brent crude closely mirror those of WTI. Brent reached an all-time high of $147.50 per barrel during the oil market boom in July 2008, whereas WTI futures dropped to a historic low of negative $40 per barrel on April 20, 2020, due to a lack of storage options during the COVID-19 pandemic. On the same day, Brent futures bottomed at around $25 per barrel.
Understanding Crude Oil
Crude oil is a vital global commodity, essential for energy production and as a raw material in manufacturing plastics, chemicals, and other products. In the U.S., nearly all crude oil is refined into petroleum products like gasoline, diesel fuel, and heating oil.
Crude oil prices are affected by multiple factors, including weather conditions in the U.S. that influence demand for heating oil and natural gas, natural disasters, geopolitical conflicts, and economic conditions. The Organization of the Petroleum Exporting Countries (OPEC) also plays a significant role by adjusting production levels.
WTI vs. Brent Crude
WTI crude, sourced from oilfields in Texas, North Dakota, and Louisiana, is delivered to Cushing, Oklahoma. It has an API gravity of 39.6 degrees and a sulfur content of 0.24%, making it a light, sweet crude oil. WTI is the benchmark for U.S. oil prices.
Brent crude, extracted from the North Sea near Europe, comprises oil from the Brent, Ekofisk, Forties, and Oseberg fields. With an API gravity of 38 degrees and a sulfur content of 0.4%, Brent is slightly heavier and less sweet than WTI. It serves as the benchmark for international oil markets, including the Middle East, Europe, and Africa.
Key Differences Between WTI and Brent
Extraction: WTI is extracted from U.S. oilfields, while Brent is sourced from the North Sea.
Composition: WTI is lighter and sweeter than Brent.
Geopolitical Influence: WTI is more influenced by U.S. politics, whereas Brent is affected by international politics and embargoes.
Trading Platforms: WTI futures are primarily traded on the New York Mercantile Exchange (NYMEX), while Brent futures are traded on the Intercontinental Exchange (ICE).
Pricing: Brent has historically traded at a slight premium to WTI.
The Brent/WTI Spread
The Brent/WTI spread is the price difference between Brent and WTI crude. Historically ranging between $4 and $8 per barrel, this spread can widen or narrow based on U.S. and international supply and demand conditions. For instance, it reached nearly $14 per barrel in April 2011 amid market fears of significant oil supply disruptions in the Middle East due to protests.
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