Oil is a globally traded commodity with two dominant benchmark grades: WTI (West Texas Intermediate) and Brent. Both track crude oil prices but reflect different regions, supply routes, and quality specifications, and they don't always move by exactly the same amount.
WTI vs Brent
| Feature | WTI | Brent |
|---|---|---|
| Source | US shale/onshore, priced at Cushing, Oklahoma | North Sea fields |
| Benchmark for | North American oil pricing | ~2/3 of global oil contracts |
| Quality | Lighter, sweeter (lower sulfur) | Slightly heavier than WTI |
| Typical spread | Usually trades at a discount to Brent | Usually trades at a premium to WTI |
What Drives Oil Prices
- 1.OPEC+ production decisions — coordinated supply cuts or increases directly affect available barrels and price.
- 2.US inventory data — the weekly EIA report and API report show whether crude stockpiles are rising (bearish) or falling (bullish).
- 3.Global demand expectations — tied closely to GDP growth forecasts, especially from China and the US.
- 4.Geopolitical supply risk — conflicts or sanctions affecting major producers (Middle East, Russia) can spike prices sharply.
- 5.US dollar strength — like other commodities, oil priced in USD tends to face pressure when the dollar strengthens broadly.
Key Scheduled Events
| Event | Frequency | Typical impact |
|---|---|---|
| EIA Weekly Petroleum Status Report | Weekly (Wed, ~14:30 UTC) | Can move WTI 1-3% in minutes |
| API Weekly Statistical Bulletin | Weekly (Tue evening, ~20:30 UTC) | Early signal ahead of EIA |
| OPEC+ meetings | Periodic, scheduled announcements | Can cause multi-day trend shifts |
Oil futures markets can experience contango (future prices higher than spot) which affects the roll cost of longer-term positions in futures-linked CFDs. Combined with geopolitical headline risk, oil can gap sharply outside normal trading hours.
Sessions & Volatility
Oil trades nearly 24 hours via futures-linked pricing, with the highest liquidity during the US session (roughly 13:00-21:00 UTC) around the EIA report and NYMEX floor hours. Typical daily ranges run 1.5-3% in calm conditions, expanding sharply around OPEC+ announcements or supply shocks.