CRUDE OIL

WTI CRUDE OIL

Crude Oil is a naturally occurring liquid fossil fuel resulting from plants and animals buried underground and exposed to extreme heat and pressure. 

Crude oil is one of the most demanded commodities and prices have significantly increased in recent times. Two major benchmarks for pricing crude oil are the United States’ WTI (West Texas Intermediate) and United Kingdom’s Brent. 

The differences between WTI and Brent include not only price but oil type as well, with WTI producing crude oil with a different density and sulfur content. The demand for crude oil is dependent on global economic conditions as well as market speculation.

Crude oil prices are commonly measured in USD. Although there have been discussions of replacing the USD with another trade currency for crude oil, no definitive actions have been taken. 

Key Reports/Factors that Move Markets

EIA weekly reports 

(Wednesdays) – track U.S. crude inventories levels stored for future use

API weekly reports

 (Tuesdays) – track total U.S. and regional inventories and refinery operations data

OPEC meetings 

of 14 top exporting countries – when OPEC talks, the oil markets listen

Refinery capacity reports 

 track use vs. capacity for available oil refineries

GDP reports

track health of the U.S. economy and in turn, consumer demand for gasoline 

Natural gas inventory reports

cheaper nat gas affects oil demand as a viable energy alternative

Weather events

can impact major production sites and pipelines

World events

war, financial crises elections and more can affect oil policy and cost of oil

Import/export policy changes

 can dramatically impact world oil supply and, in turn, prices

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