In recent months, all areas of the market have undergone strong changes. After the start of the war between Ukraine and Russia, many countries imposed sanctions against the latter. And since it was a major exporter of energy resources around the world, changes in the entire market structure became inevitable.
The spread between Brent Crude and West Texas Intermediate rose to an all-time high in the first months of the war.
There are several reasons for this event. In this article, we will break down the main differences between the two global oil markets and explain how to predict the live Brent Crude price.
Brent Crude vs. West Texas Intermediate: Differences
Important Differences
The first thing to consider is that Brent Crude and West Texas Intermediate are the world's two major crude oil markets. Investing or trading in either of these markets can yield the desired results.
However, understanding the main differences will help you make better use of your resources and choose the market that is best suited to realize your goals.
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Brent Crude
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West Texas Intermediate |
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Produces a light, low-sulfur, low-density blend of crude oil |
Produces sulfur oil with even lower sulfur content, which makes the mixture even lighter
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Extraction takes place in the North Sea |
Production takes place in the U.S., mostly in Texas
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Deal offerings are limited in the long term as the main mining sites are depleted
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The extraction of raw materials is more stable because the extraction sites change regularly |
A lot of other details to look out for can be found at capital.com.
Recent Changes
The chart provided by Brent Crude shows the live Brent Crude price. On it, we can see a significant increase in crude oil prices in early December 2022. This was influenced by several events at once:
- Demand growth and economic recovery from shortages during the pandemic.
- Nuclear talks between the U.S. and Iran.
- Russia's occupation of Ukraine.
The markets reached record highs on March 8 at $134.91 for Brent Crude and $123.70 for West Texas Intermediate.
This jump came on the announcement of the U.S. President's final ban on imports of resources from Russia. Tomitigate such a sharp rise in prices, it was decided to use part of the U.S. Strategic Petroleum Reserve.
Predictions for Future Price Changes
Most experts still say the live Brent Crude price will continue to rise because of the political situation in the world. Even if the war between Ukraine and Russia ends soon, its consequences will still be observed around the world in the nearest future.
The current sanctions and the institution of reputation will take their toll, so producers will try to find other sources of raw materials in the coming years.
The easing of sanctions against Iran may help to solve the problems of demand and price growth, but it will not be enough for a full recovery of the oil market.
Under such conditions, it will be obvious that to not continue the price increase, it is necessary to keep it at a sufficiently high level.
According to the preliminary forecasts, this price may reach $185. More information about the forecasts can be found on the website.
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