Oil benchmarks are frequently quoted in the media as the price of oil.
There are three primary benchmarks:
WTI North Sea Brent crude ( or simply Brent crude)
WTI crude (West Texas Intermediate
(The difference in price between Brent and WTI is called the Brent-WTI spread.)
WTI crude oil is important because it is an oil benchmark. The significance of a benchmark in the oil market is that benchmarks serve as a reference price for buyers and sellers of crude oil. Brent crude and WTI crude are the most popular benchmarks, and their prices are often contrasted.
Theoretically, WTI crude should trade at a premium to Brent crude, but this is not always the case. While the two crude oil varieties can trade at similar price points, each one has its own unique supply and demand market, and therefore its price reflects its individual market fundamentals.
Even though WTI is the highest-quality light sweet crude available, it is not the most used oil. That title goes to Brent crude. WTI's market is primarily the United States. This is partially due to an export ban on U.S. crude oil, which was reversed in late 2015.
Even though exports of WTI can now occur, transporting WTI overseas to Brent crude's market could come at a cost that would make WTI unable to compete with Brent crude in terms of pricing.
Today (03/07/2018) US crude oil prices rose above $75 a barrel for the first time since 2014 on Tuesday after Iran appeared to threaten to disrupt oil shipments from the Middle East Gulf if Washington pressed ahead with sanctions. Exacerbating those surprise events, a Trump administration official told reporters that American diplomats are pushing oil buyers to cut off all purchases of Iranian crude by the beginning of November. it now expects the shipments to fall by 1.1 million bpd by year end. It previously saw the sanctions wiping out 700,000 bpd through 2019.
[Nutshell: WTI crude oil is produced in America. It is actually a blend of several U.S. domestic streams of light sweet crude oils. WTI is produced in different areas of the United States and refined mostly in the Midwest and Gulf Coast regions. The major trading hub for WTI is Cushing, Oklahoma.]