Crude Oil Prices Explained - WTI vs Brent

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Oil prices can be quite confusing, as there are more than one and they can have different names across the trading world. In this crude oil prices explained video we try to clear it all up by talking about what crude oil actually is, how crude oil prices are determined and the difference between the two main types of oil - WTI and Brent.

There are several other types of oil being traded across the globe, be it from countries like Russia or Iran, or the oil coming from the OPEC countries. But the prices of WTI Crude oil (aka West Texas Intermediate) and Brent remain the most referred to oil prices on the global markets. Both are denominated in U.S. dollars and both are part of more interconnected economies and infrastructures that make it easier for that type of oil to be transported to wherever they buyer is.

That isn’t to say that their oil price isn’t impacted by the other sources of oil. Far from it. OPEC meetings are still the most important single events when it comes to oil trading be it for Crude or for Brent. But those two are definitely the most popular among traders who invest and trade vast amounts of money in oil futures daily, causing oil prices to frequently have large swing in both directions.

The oil price of Brent and WTI does tend to have a correlation, being part of a supply chain for roughly the same resource, but it is important to understand that they are two separate things.

WTI is extracted from wells in the United States - Texas, Louisiana and North Dakota. From there they are shipped to refineries across the U.S. to be turned to more user-friendly things like gasoline, heating oil and airplane fuel.

Brent refers to oil taken from the North Sea and is a common name for the four oil grades extracted there by different countries and companies - Brent blend, Forties blend, Osberg and Ekofisk.

One important thing to remember is that Brent oil is graded as light or “sweet” because of its level of sulfur. This makes it easier to refine compared to WTI and brings its overall cost down.

Crude oil trading deals with oil futures. As the price is quite volatile, markets have settled on dealing with contracts that are executed in one, three or even more months ahead. This way buyers get a guaranteed quantity of this valuable resource and they can plan ahead without worrying about the day-to-day movements of WTI oil or Brent.

If you liked this video about crude oil price give us a thumbs up and make sure to subscribe to the channel for more videos like this!

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[vladbozhchenko]

Who's watching this when WTI price became negative?

[liamsalzman]

Saudis and Russia calling to update your video

[nitinlalwani]

Who is watching this after WTI crude oil Slipped below 0$ per barrel. 😂😂😂

[joedellinger]

If volatility is what traders like, as you say, then they must be deliriously happy right now!

[perkubuta]

2020-04-20
WTI CRUDE • 4.900 -13.370 -73.18%
BRENT CRUDE • 26.33 -1.75 -6.23%

[nothingsurprisesmeanymore]

I'm here to see how much to charge the gas station to fill my car up 😆

[sims]

I just bought some Brent but didn’t know what it stands for, this was informative. 😎

[ResourceTalks]

Oil under $10 a barrel? Where is this headed? Can we see negative oil prices for long? It sounds stupid, I know. But negative inflation too sounded stupid 30 years ago. Hyperinflation looms around the corner. Be VERY careful buying oil stocks in 2020 if your income is at risk higher than 30%, your (personal) debt to assets ratio is higher than 0, 5 and your emergency fund doesn’t cover a time period that would normally take for you to get back on your feet (run your scenario through history and see how long it would’ve taken for you to start earning a sufficient income again in a crisis).

[whitedan]

"as low as 50$" aged like milk i would say ;)

[manishthakur]

I put my screen upside down to make negative price to positive

[TruckTaxiMoveIt]

Enjoy the low fuel prices while you can.

[chickenmanfarmer]

i have to tell you, i am not a trader...you'd need some money for that and right now, i'm not willing to chance it....but i come to you as one of my go to channels for understandable info. thank you

[reginaldegbudin]

Perfect time for this video to pop-up.

[hamidpacino]

Thanks for the good content
Subscribed 👌

[acommon]

I like the way you communicate. Well done!

[alcazarfreddy]

Brent, WTI, its the same.... until Corona came and those dealing with WTI lost a loooot of money

[bigboss]

Awesome & very easy presentation for new comers as well .. 👍

[Muckian]

How high of a divergence in the two is possible/plausible? If US output is greatly reduced as looks likely in the current low price market is there a chance WTI divergence to OPEC produced brent could increase greatly or would the two still move in tandem?

[justiceknight]

Both WTI and Brent crude price was dropping since 2018 and yet price of gas remain up. (I was looking at oil prices for years)

[ssanjaychavan]

Explain nyc sir
Thnx....
Wht u think bottom near future? ?