WTI-Brent spread narrows as oil market tightens

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Benchmarks and Trading Markets

WTI is the benchmark crude for North America. 

The NYMEX (New York Mercantile Exchange) division of the CME (Chicago Mercantile Exchange) lists futures contracts of WTI crude oil. Delivery for WTI crude futures occurs in Cushing, Oklahoma.

Brent crude oil futures trade on the Intercontinental Exchange (ICE). Brent crude is traded internationally, so the delivery locations will vary by country.

Since both types of oil are used as benchmarks, different countries will use them in different manners. Asian countries tend to use a mixture of Brent and WTI benchmark prices to value their crude oil.

West Texas Intermediate (WTI)

WTI refers to oil extracted from wells in the U.S. and sent via pipeline to Cushing, Oklahoma. The fact that supplies are land-locked is one of the drawbacks to West Texas crude as it’s relatively expensive to ship to certain parts of the globe. The product itself is very light and very sweet, making it ideal for gasoline refining, in particular. WTI continues to be the main benchmark for oil consumed in the United States. 

How much gasoline is produced by one barrel of crude oil?

Oil refining in the U.S. typically produces up to 20 gallons of standard automobile gasoline and up to 12 gallons of diesel fuel (or "heating oil") per barrel. Each barrel contains 42 gallons of crude oil.

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