West Texas Intermediate (WTI)
Candlefocus EditorWest Texas Intermediate (WTI) is a light, sweet crude oil that is among the most important global oil benchmarks. It is a light, sweet crude grade that has low sulfur content which makes it easier and cheaper to refine, store, transport and trade than other grades of crude oil. WTI serves as a price benchmark for the majority of oil-futures contracts traded on the New York Mercantile Exchange (NYMEX). It is actively traded as a medium-term market futures investment. WTI is often compared to Brent crude, which is an oil benchmark that is used to settle two-thirds of the world's global oil contracts based on oil extracted from the North Sea.
Origin and Characteristics of WTI
WTI is produced primarily from wells located in the Permian Basin in Texas. It is made up of hydrocarbons including n-alkanes, olefins, and higher boiling-point aromatic compounds. WTI's low sulfur content makes it easier to refine and store than other crude oils, and it is a common feedstock for refineries around the world. It can also be used as a basis for production of aviation fuel, diesel fuel, and motor gasoline. It is extracted from wells located in the Permian how to Basin in West Texas and has a high American Petroleum Institute (API) gravity, ranging from 39.6 to 43.6. It ranges in density from 5.8 to 7.9 degrees API.
Uses of WTI
WTI is one of the most important global oil benchmarks. It is used extensively to reference prices in the oil market, both domestically and internationally. Apart from being used to set the price of oil-futures contracts, WTI is also used in setting the price of gasoline and production of many motor fuels, as well as in transportation and storage. WTI is also used in the global market for derivatives, such as swaps and options. Furthermore, WTI is also used by a variety of businesses such as hedge fund managers, refiners, and oil traders around the world.
Conclusion
West Texas Intermediate (WTI) is a light, sweet crude oil that is one of the most important global oil benchmarks. It serves as the basis for the majority of oil-futures contracts traded on the New York Mercantile Exchange (NYMEX) and is actively traded as a medium-term market futures investment. WTI is known for its low sulfur content which makes it easier and cheaper to refine, store, transport and trade than other forms of crude oil. It is used extensively in reference to oil and gasoline prices, hedge fund managers, refiners, and oil traders around the world, and as the basis for derivatives such as swaps and options.