WTI crude oil analysis
2023-08-28
Summary:
WTI crude, or West Texas light oil, is vital in North America, traded on NYMEX. Found across the US, delivered in Cushing, OK. Trade via futures.
West Texas Intermediate (WTI), also known as Texas Light Sweet, is a type of crude oil characterized by its low density ("light") and low sulfur content ("sweet"). This makes WTI particularly suitable for refining into gasoline and diesel. Produced in North America, WTI serves as the benchmark for crude oil pricing in the region. Its production spans multiple states, including Texas and North Dakota, with refining concentrated in the Midwest and Gulf Coast areas. The main trading hub for WTI is in Cushing, Oklahoma, which is also the delivery location for crude oil contracts.
WTI crude oil is one of the most important crude oil varieties in the United States, and its production and quality have a significant impact on the global oil market. WTI crude oil has a superior geographical location and is easy to transport and export; therefore, it has high liquidity and wide acceptance in the international market. Trading and pricing mainly occur on the New York Mercantile Exchange (NYMEX) in the United States.
WTI crude oil is a high-quality, lightweight, and low-sulfur crude oil with relatively low density and viscosity. Its origin is mainly in the western region of Texas, United States; hence, it is named West Texas Intermediate Crude Oil. The quality of WTI crude oil makes it easier to extract into gasoline, diesel, and other petrochemical products, making it highly favored by the market.
As an important component of the international crude oil market, the price of WTI crude oil is influenced by various factors. This includes factors such as global supply and demand, geopolitical risks, economic conditions, weather changes, and financial markets. The fluctuations in crude oil prices have a significant impact on the global economy and energy markets; therefore, the trading activities of WTI crude oil have attracted much attention.
All crude oil produced or sold in the United States is priced based on light and low-sulfur WTI. WTI crude oil has futures and spot contracts; some trading platforms directly represent it with WTI; and some codes are crude or USOil.
The futures contract for WTI crude oil is traded on the New York Mercantile Exchange, with a contract unit of 1000 barrels of crude oil per barrel and a contract term of one month. Investors and traders can participate in the price fluctuations of WTI crude oil through trading contracts. This type of futures trading provides risk management and speculative opportunities for the crude oil market, as well as a way for energy consumers to discover prices and purchase protection.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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