A benchmark crude oil or crude oil is crude oil that serves as a reference price for buyers and sellers of crude oil. There are three main benchmarks, West Texas Intermediate (WTI), Brent Blend, and Dubai Crude. Other notable mixes include OPEC Reference Basket used by OPEC, Singapore-traded Tapis Crude in Singapore, Bonny Light is used in Nigeria, Urals oil used in Russia and Mexico Isthmus. The Energy Intelligence Group publishes a manual that identifies 195 major crude oil streams or fused into the 2011 edition.
Benchmarks are used because there are many different varieties and grades of crude oil. Using benchmarks make reference to the type of oil easier for sellers and buyers.
There is always a spread between WTI, Brent and other mixtures due to relative volatility (high API gravity is more valuable), sweet/sour taste (lower sulfur is more valuable) and transportation costs. This is the price that controls the world oil market prices.
Video Benchmark (crude oil)
West Texas Intermediate (WTI)
West Texas Intermediate is used primarily in the US. Lightweight (API gravity) and sweet (low sulfur) makes it ideal for producing products such as low sulfur and low sulfur diesel. Brent is not as light or as sweet as WTI but it is still a high quality crude. OPEC basket is slightly heavier and more acidic than Brent. As a result of these gravity and sulfur differences, before 2011 WTI is usually traded with dollars or two premiums for Brent and one or two more dollars premium to the OPEC basket.
Since 2011, WTI has traded at significant discounted prices to Brent.
Maps Benchmark (crude oil)
Brent Blend
Brent Crude is a mixture of crude oil from 15 different oil fields in the North Sea. This is a benchmark used mainly in Europe although it is also mixed with OPEC reference baskets that are used worldwide.
Dubai and Oman
Dubai Crude, also known as Fateh, is a heavy acidic crude extracted from Dubai. It is manufactured in Dubai Emirate, part of United Arab Emirates. Dubai's only refinery, in Jebel Ali, takes condensate as raw material, and therefore all Dubai crude oil production is exported. For years it was the only oil freely traded in the Middle East, but gradually the spot market has grown in Oman crude as well.
Over the years, most of the oil producers in the Middle East have taken Dubai's average spot price monthly and Oman as the benchmark for sales to the Far East (WTI and Brent futures prices are used for exports to the Atlantic Basin). In July 2007, a potential new mechanism emerged in the form of the Dubai Mercantile Exchange, which offered futures contracts in Omani crude oil. Will the DME be successful, and whether Omani's futures price will be adopted by the producer and buyer as a benchmark, remains to be seen.
Canadian Crude
Edmonton Par and Western Canadian Select (WCS) "is a benchmark of crude oil for the Canadian market.At Edmonton Par and West Texas Intermediate is a high-quality low sulfur crude oil with an API gravity level of about 40 ° C. Conversely, WCS is the weight of crude oil with API gravity level of 20.5 °. "
The Canadian Crude Index (CCI) serves as a benchmark for oil produced in Canada. This allows investors to track the price, risk and volatility of Canadian commodities. CCI provides fixed price references for Canadian crude oil and provides accessible and transparent indices to serve as a benchmark for building investmentable products, and ultimately can increase demand for global markets.
Contract
Due to its excellent liquidity and price transparency, this contract is used as a major international price benchmark.
The first futures contract on crude oil was traded in 1983, with the Chicago Board of Trade (CBOT) and the New York Mercantile Exchange (Nymex) both attempting to take advantage of the government's de-regulation of crude oil. The initial CBOT contract has a delivery problem, so customers leave it for Nymex.
Crude oil is the most actively traded commodity in the world, and NYMEX Division's light crude futures contracts into the world's most liquid form of crude oil trading, as well as trading in the world's largest volume of contracts on physical commodities. Additional risk management and trading opportunities are offered through options on futures contracts; calendar deployment option; crack propagation options on different futures and futures prices of crude oil and futures for gasoline and crude oil futures; and the average price option.
Trading contracts in a 1,000 barrel unit, and the delivery point is Cushing, Oklahoma, which is also accessible to the international spot market through pipeline. The contract provides delivery of several internationally traded foreign and domestic crude oil classes, and serves a variety of physical market needs.
See also
- Argus Sour Crude Index (ASCI)
- Gas usage and prices
- Petroleum industry
- Oil prices
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References
- Natural Resources Canada NRC (May 2011), Canadian Crude Oil, Natural Gas and Petroleum Products: 2009 & amp; Outlook to 2030 (PDF) , Ottawa, ON: The Government of Canada, p.Ã, 9, ISBN 978-1-100-16436-6, archived from the original ( PDF) on October 3, 2013
Source of the article : Wikipedia
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