Brent Oil Futures - Dec 18 (LCOZ8)

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Brent and WTI are the two major trading categories of crude oil and are the two major benchmarks of global oil price setting, but in recent years Brent has been increasingly selected as a benchmark. According to ICE futures, it is estimated that 60% of crude oil traded worldwide is cheaper than Brent crude. Before explaining the importance of Brent and WTI to the futures market, you should look at the difference between them. Although Brent originally referred to oil extracted from the Brent oil field in the North Sea off the coast of England, for various reasons it refers to four different crude oil grades extracted from various wells in the North Sea - a mixture with Osberg Ekofisk (aka BFOE). Mixing these four types of oil actually makes Brent oil heavier, but it is still considered to be relatively lightweight and low in sulfur content.

The second most important reference price of Brent crude. Brent crude originally came from 15 oil fields in the North Sea, but it is an international standard for crude oil prices. Its usage far exceeds the price of WTI as a benchmark, especially outside the United States. The density and sulfur content of Brent and WTI are slightly different, but the difference is relatively small. Prior to 2011, the prices of the two spot crude oils rose almost. As WTI and Brent crude are basically the same product, this may not be surprising. A standard economic model of product pricing can predict that arbitrage transactions will eliminate price differences between two oil prices. If the market price of a certain market (such as Market A) is higher than the other market (Market B), in principle, you can purchase the item on Market B and resell it at Market A. When the two prices are different