WTI Crude (WTI)

WTI Crude (West Texas Intermediate) is one of the world's two dominant crude oil benchmarks, alongside Brent. "Light" means the oil flows easily; "sweet" means it contains very little sulfur. These qualities make it cheaper to refine into gasoline and jet fuel, which is why refiners prize it. The quoted price you see on commodities data pages is in US dollars per barrel, where one barrel equals 42 US gallons — a unit dating back to 19th-century Pennsylvania oil fields.

WTI is traded as a futures contract on the CME Group's NYMEX exchange. Each standard contract covers 1,000 barrels, so a price move of just one dollar per barrel represents a $1,000 change in the value of one contract. Physical delivery for those who hold contracts to expiration happens at the pipeline hub in Cushing, Oklahoma, which is why Cushing's storage levels are watched closely — when tanks fill up, it creates downward pressure on the WTI price. The extraordinary case of WTI briefly trading below zero in April 2020 happened precisely because storage at Cushing was nearly full and sellers could not find takers.

A common confusion is treating WTI and Brent as interchangeable. They are not. Brent is priced off the North Sea, reflects the global seaborne market more directly, and often trades at a different level than WTI. The gap between them is called the WTI-Brent spread. Understanding which benchmark a price quote refers to matters, because spot and futures prices can differ meaningfully between the two grades at any given moment.