What is West Texas Intermediate?
West Texas Intermediate, often shortened as WTI, is a high -quality level of oil, which is commonly used as a scale for oil prices. In the United States refineries, it is widely used due to its domestic origin and composition, which makes it suitable for improvement in gasoline. It is classified as light, sweet raw and requires less processing than heavier oils to adhere to environmental standards when burned as fuel. The degree of oil lightness is measured by the American Petroleum Institute (API) gravitational system. A higher number indicates lower or lighter oil. Light oils must have at least 38 degrees gravity and West Texas Intermediate's is 39.6 degrees. It is a light, sweet raw, although its sulfur content is higher, at 0.37 percent and is harder, with gravity of API 38.3 degrees. Brent prices are usually $ 1 to $ 2 US dollars (USD) for barrel at West Texas and are used as a scale on European markets.
New York Mercantile Exchange, or Nymex, uses the intermediate West Texas prices as the basis for oil futures. His benchmark status comes from the sensitivity of its price to the condition of the global oil market. The extensive use of WTI in the United States has strengthened it as a scale on the domestic market. International entities accepted it as a recognition of the importance of Nymex and became a global scale.
In 2010, some investors began to doubt the suitability of Intermediate West Texas as a global oil scale and suggested that Brent should be used instead. They argued that all over the world for heavier oils reduced the importance of light, sweet raw on the global market. In addition, WTI prices began to show increased volatility compared to other signs of oil, which ran more expensive to ensure oil. Saudi Arab oil company stopped using it in January 2010 for oil supply prices and Aramco launched a price delivery with the Cragus Sour Crude index, which is based on three degreesH oil from the Gulf of Mexico. In the autumn of that year, NYMEX officials announced their intention to continue using the West Texas intermedia benchmark because they felt it was still reflected in the global market, retaining a higher volume of trading than Brent.