Brent Crude Falls 45 Cents, Or 0.7 Percent to $64.97 Per Barrel
Brent crude futures were down 45 cents at $64.97 a barrel. The analysts observed that a strengthening dollar that hit a six-day high, however, weighed on oil prices. It is concluded that the robust dollar makes oil and other dollar-denominated commodities more expensive for holders of other currencies. However, since 7the February, it was seen that U.S. West Texas Intermediate crude futures were up 58 cents, or 1 percent, at $62.26 a barrel. Prices rallied to a high of $62.74 a barrel early in the session. Which is the highest price since 7the of Feb.
In this post, you will get to know the difference between the Brent Crude as well as WTI. One of the major differences between Brent Crude and West Texas Intermediate (WTI) is their origin. The Brent Crude originates from oil fields in the North Sea, however, West Texas Intermediate is sourced from U.S. oil fields. Mainly, it is sourced from Texas, Louisiana and North Dakota. The characteristics of both Brent Crude and West Texas Intermediate are light and sweet, which make them ideal for refining into gasoline.
However, in nature, Brent Crude is more ubiquitous, and most oil is priced using Brent Crude as the benchmark, but in The United States, West Texas Intermediate is the preferred measure.
Since Brent Crude is produced near the sea; therefore, the transportation cost is significantly lower. While in case of West Texas Intermediate, it is produced in landlocked areas, making transportation costs heavier.
Nowadays, WTI has become cheaper than Brent Crude oil due to advancements in oil drilling and fracking. However, earlier, Brent Crude tended to be cheaper than West Texas Crude.
From the summer of 2014 to the spring of 2015, revolution is observed where the increased production led oil prices to fall from above $100 to below $50. In the overall health of the energy complex, the price of oil is the main factor.
Among some of the other factors that can lead to significant differences between Brent Crude and West Texas Intermediate geopolitical trouble is one of them. At times of crisis, the spread blows out as political uncertainty leads to surges in Brent Crude prices. Since West Texas Intermediate is based in landlocked areas in the United States, so it is less affected.
In terms of quality, WTI and Brent crude are quite similar. However, it was observed that for many years, there was the very small difference in the price of Brent and WTI. But, now from 2011, the two benchmarks have diverged.