WTI Crude
West Texas Intermediate crude oil — the US benchmark grade traded on NYMEX, priced in $/barrel and settled at Cushing, Oklahoma.
West Texas Intermediate (WTI) is a light, sweet crude oil and the primary benchmark for US crude pricing. "Light" refers to its low density (API gravity ~39°); "sweet" means low sulphur content (~0.24%), making it easier and cheaper to refine into gasoline and diesel.
WTI futures trade on the CME Group's NYMEX exchange in contracts of 1,000 barrels. The delivery point is Cushing, Oklahoma, the largest crude oil storage hub in the US. Prices reflect both supply-demand fundamentals and the storage dynamics at Cushing.
WTI typically trades at a discount to Brent (the global benchmark) reflecting transport costs and US production dynamics, though the spread fluctuates significantly with pipeline capacity changes and export volumes.
Example
WTI front-month futures trade at $77.50/bbl. Each NYMEX contract covers 1,000 barrels, so one contract has a notional value of $77,500. A $1/bbl move generates a $1,000 gain or loss per contract.
Related Terms
Benchmark Price
A widely accepted reference price for a commodity that other grades, contracts, or products are priced against — WTI, Brent, Henry Hub, and COMEX gold are key examples.
BeginnerBrent Crude
The global benchmark crude oil grade produced from the North Sea, priced in $/barrel and the reference for roughly two-thirds of the world's oil trade.
BeginnerCommitment of Traders (COT)
A weekly CFTC report showing the aggregate positions of commercial hedgers and non-commercial speculators in US futures markets — a key sentiment gauge.
IntermediateCrack Spread
The price difference between crude oil and refined petroleum products (gasoline, diesel), representing the refining margin.
AdvancedEnergy Complex
The collective term for energy-related commodities — crude oil, natural gas, refined products (gasoline, heating oil, diesel) — and the markets and instruments around them.
BeginnerGrade / Quality Spec
The standardized quality specifications a commodity must meet to be deliverable against a futures contract — API gravity and sulphur content for crude oil, purity for metals.
IntermediateHeating Oil
A distillate fuel oil used for space heating and as a diesel proxy, traded on NYMEX in $/gallon and a key component of crack spread calculations.
IntermediateNatural Gas
A hydrocarbon energy commodity priced in $/MMBtu on NYMEX, known for extreme seasonal volatility driven by heating and cooling demand.
IntermediateOPEC
The Organization of the Petroleum Exporting Countries — a cartel of major oil producers that coordinates production levels to influence global crude prices.
IntermediateRBOB Gasoline
Reformulated Blendstock for Oxygenate Blending — the US benchmark unleaded gasoline futures contract traded on NYMEX in $/gallon.
IntermediateSpot Price
The current market price at which a commodity can be bought or sold for immediate delivery.
BeginnerStorage Cost
The fees paid to store a physical commodity — tank rental for crude, vault charges for gold — a key driver of contango in storable markets.
Intermediate