What is Brent and what is Wti, the two “types” of oil

There are many varieties of oil which differ mainly in the chemical characteristics of the mixture of hydrocarbons that compose them. A bit like water that changes according to the source from which it flows (there are more or less heavy waters, calcareous or less calcareous ones, and so on), petroleum changes according to the place, the geological profile, where it is extracted.

Basically there are two main types of crude oil, Brent which is extracted in the North Sea and Wti (West Texas Intermediate), in the South of the United States. These are the main baskets that are taken as a reference by investors and/or speculators from all over the world. Brent futures contracts are listed on the Inter Continental Exchange (ICE) while those of the WTI are traded on the Nymex in New York.

Brent crude oil is black gold, as it is defined, which comes directly from the North Sea and which represents the oil that holds about 60% of the market. This is because this oil has a much lower cost than the other type, i.e. the one extracted from West Texas: Brent, in fact, is extracted near the sea and consequently the costs associated with transport are much lower than those characterizing the other .

Furthermore, Brent oil is characterized by a mixture of various substances, always of an oil nature, which are Brent Blend, Forties Blend, Oseberg and Ekofisk which increase its economic value.

Brent is the type of oil most traded in the world and taken as a reference by many majors in the sector. Both Brent and Wti are good petroleum qualities, i.e. easy to transform (through refining) into petrol and diesel, they are sweet (sweet) and light (light) based on the sulfur content and their density.

A high sulfur content makes refining more difficult and therefore more expensive. Regarding weight, Api gravity is also used which indicates how heavy or light a liquid is compared to water. Wti has an Api gravity of 39.6 while Brent has a gravity of 38.06 and for this reason Wti is considered better than Brent, having a lower degree of sulfur and a higher Api gravity.

For this reason, being of better quality, Wti cost more until the USA began to focus heavily on extraction, even with unconventional techniques such as fracking. By increasing supply, the price has fallen and so now Brent costs more than WTI. Furthermore, the United States has changed from being a major oil importer to an exporter, precisely because it has increased production, overtaking Russia and Saudi Arabia.

THE MAIN DIFFERENCES BETWEEN BRENT AND OTHER OILS

The difference with the other oil subject to investment, i.e. WTI, consists in the fact that the latter is more refined and the ratio between density and presence of water in the liquid is higher, making the latter become better both in terms of use than with regards to the investment cost.

Brent, on the other hand, is favored by the Asian market, which carves out a precise market share equal to 50% of global requests and this thanks to the fact that Brent takes on slightly higher values than West Texas Intermediate. Although Brent is less refined, all the qualities that distinguish it ensure that it is more appreciated by consumers, guaranteeing it greater exposure on the market itself and allowing it to increase its value steadily over time.

THE QUOTATION AND PRICE OF BRENT OIL

Influencing the quotation and price of Brent oil, in addition to the great demand proposed by the market whose demand is constantly growing, is also represented by a further fact, namely the production flows of the North Sea, where the platforms periodically stop extracting oil.

This causes crude oil to become even more precious and allows the demand for it to increase over time, unlike what happens with WTI, which is extracted constantly so that, as can be easily understood, supply exceeds demand resulting in a drop in the price.

You should know that Brent generally has a price that is always about 3 dollars higher than WTI and the reasons are those mentioned above. As regards the price, currently established at 62.44 per barrel, it should be emphasized that this figure is subject to constant variations which mainly depend on production and the demand proposed by investors.

Following the quotation and the price in real time, which vary periodically, is possible by exploiting the web and portals such as Investire Petrolio and similar, which report the updating of the quotations in real time, entering the variations daily and whenever the price has undergone a rise or fall.