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
of 14 top exporting countries – when OPEC talks, the oil markets listen
Refinery capacity reports
track use vs. capacity for available oil refineries
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
can impact major production sites and pipelines
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