128 PETROLEUM TECHNOLOGY, ECONOMICS, AND POLITICS
the world; the four primary benchmarks, of which these are priced
internationally are:
1. Brent blend crude oil
2. West Texas intermediate (WTI) crude oil
3. Dubai crude oil
4. The OPEC Basket crude oil.
By way of clarification, a benchmark is, in the current context,
a standard against which the properties of crude oil can be measured or compared. When evaluating the price of any crude oil it is
important to compare the crude oil against an appropriate benchmark crude oil.
The Brent crude oil blend is based on the prices of Brent crude,
which is a light, sweet crude oil and is actually a combination of
crude oil from 15 different oil fields in the Brent and Ninian systems located in the North Sea. The API gravity is 38.3°, making it
a light crude oil, but not quite as light as West Texas Intermediate
crude oil, while it contains about 0.37% by weight sulfur, which
makes it a sweet crude oil, but slightly less sweet than West Texas
Intermediate crude oil. The Brent blend is ideal for making gasoline
and middle distillates, both of which are consumed in large quantities in Northwest Europe, where Brent blend crude oil is typically
refined. However, if the arbitrage between Brent and other crude
oils, including WTI, is favorable for export, Brent has been known
to be refined in the United States (typically the East Coast or the
Gulf Coast) or the Mediterranean region. Brent blend, like West
Texas Intermediate crude oil, production is also on the decline, but
it remains the major benchmark for other crude oils in Europe or
Africa. For example, prices for other crude oils in these two continents are often priced as a differential to Brent (i.e. Brent minus
$0.50). Brent blend is generally priced at about a $4 per-barrel premium to the OPEC Basket price or about a $1 to $2 per-barrel discount to West Texas Intermediate crude oil, although on a daily
basis the pricing relationships can vary greatly.
The West Texas intermediate (WTI) crude oil is the benchmark
for oil prices in the United States based on light, low sulfur (0.24%
by weight) West Texas intermediate crude oil, which remains the
benchmark for oil prices in the United States despite the fact that
production of this crude oil has been decreasing over the past two
decades.
the world; the four primary benchmarks, of which these are priced
internationally are:
1. Brent blend crude oil
2. West Texas intermediate (WTI) crude oil
3. Dubai crude oil
4. The OPEC Basket crude oil.
By way of clarification, a benchmark is, in the current context,
a standard against which the properties of crude oil can be measured or compared. When evaluating the price of any crude oil it is
important to compare the crude oil against an appropriate benchmark crude oil.
The Brent crude oil blend is based on the prices of Brent crude,
which is a light, sweet crude oil and is actually a combination of
crude oil from 15 different oil fields in the Brent and Ninian systems located in the North Sea. The API gravity is 38.3°, making it
a light crude oil, but not quite as light as West Texas Intermediate
crude oil, while it contains about 0.37% by weight sulfur, which
makes it a sweet crude oil, but slightly less sweet than West Texas
Intermediate crude oil. The Brent blend is ideal for making gasoline
and middle distillates, both of which are consumed in large quantities in Northwest Europe, where Brent blend crude oil is typically
refined. However, if the arbitrage between Brent and other crude
oils, including WTI, is favorable for export, Brent has been known
to be refined in the United States (typically the East Coast or the
Gulf Coast) or the Mediterranean region. Brent blend, like West
Texas Intermediate crude oil, production is also on the decline, but
it remains the major benchmark for other crude oils in Europe or
Africa. For example, prices for other crude oils in these two continents are often priced as a differential to Brent (i.e. Brent minus
$0.50). Brent blend is generally priced at about a $4 per-barrel premium to the OPEC Basket price or about a $1 to $2 per-barrel discount to West Texas Intermediate crude oil, although on a daily
basis the pricing relationships can vary greatly.
The West Texas intermediate (WTI) crude oil is the benchmark
for oil prices in the United States based on light, low sulfur (0.24%
by weight) West Texas intermediate crude oil, which remains the
benchmark for oil prices in the United States despite the fact that
production of this crude oil has been decreasing over the past two
decades.