West Texas Intermediate (WTI)
West Texas Intermediate (WTI), also known as Texas Light Sweet, is a grade of crude oil used as a benchmark in oil pricing. WTI is one of the three primary benchmarks, alongside Brent Crude and Dubai/Oman, each with its own pricing and characteristics. WTI is prized for its low sulfur content and light density, making it easier to refine into gasoline and other products. It is primarily sourced from U.S. oil fields, mainly in Texas, Louisiana, and North Dakota, and serves as the standard measure for the NYMEX oil futures contract.
Characteristics of WTI
WTI is known for being 'sweet' due to its low sulfur content (0.24%) and 'light' because of its higher API gravity (39.6°). These qualities make WTI a premium choice for refining into gasoline.
Comparison with Brent Crude
WTI and Brent are both light and sweet crude oils, but they differ in sulfur content, API gravity, extraction locations, and transportation ease. WTI is usually priced slightly lower than Brent and is considered more challenging to transport due to its landlocked extraction points.
Market and Pricing
WTI is crucial for the oil market, serving as a major benchmark for oil prices in the United States. Its pricing influences and is influenced by global oil prices, with futures contracts traded on the NYMEX. Despite being lighter and sweeter, Brent has often commanded a premium over WTI in recent years due to its easier transport logistics.