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WTI and Brent: the oil price benchmarks on NYMEX and ICE
NYMEX crude 1983; Brent 1988· Asset or instrument
Fact, law or dataA rule, statute, definition or measured number.
WTI and Brent are the two crude oil grades whose futures prices set the price of most oil traded worldwide.
See it on the Money & Finance map →How it works
WTI (West Texas Intermediate) futures began on NYMEX in March 1983; each contract is 1,000 barrels delivered at Cushing, Oklahoma. Brent futures, launched in London in 1988 and now traded on ICE, settle in cash and reflect North Sea crude, to which US WTI Midland oil was added in 2023. Brent usually trades a few dollars above WTI. Physical cargoes are priced as a premium or discount to a benchmark. US investors reach oil through futures, oil ETFs or producer stocks.
Why it matters
Oil prices feed gasoline, shipping and inflation; these benchmarks decide what producers earn and what consumers pay worldwide.
Facts, rules and data
NYMEX and ICE contract specifications and price histories, Platts and Argus price assessments, and US Energy Information Administration price data.
Debates and risks
Whether Brent, now partly made of US oil, or Asian Dubai and Oman benchmarks will dominate pricing as oil trade shifts toward Asia.
Connections (4)
▸Saudi Exchange (Tadawul) and the 2019 Aramco IPO rises and falls with WTI and Brent: the oil price benchmarks on NYMEX and ICEMainstream view
The connection
Saudi Aramco is the largest company on Tadawul, and oil revenue funds the government spending that drives Saudi banks, builders and consumers. So when Brent rises, Saudi earnings, budgets and liquidity improve and the main TASI index tends to rise; when oil falls, spending cuts and weaker sentiment usually follow.
When and why
Riyadh; oil provides well over half of Saudi government revenue, and Aramco has been listed on Tadawul since December 2019.
How solid is the link?
Correlation studies of TASI and Brent prices, Saudi finance ministry budget data, and IMF Article IV reports on Saudi Arabia.
Debates and risks
The link is loose day to day; government support, dividend payouts and Vision 2030 spending can move Saudi stocks independently of oil.
▸WTI and Brent: the oil price benchmarks on NYMEX and ICE are traded partly on NYMEX, owned by CME Group: Chicago's futures giant (CME, CBOT, NYMEX)Fact, law or data
The connection
WTI futures trade mainly on NYMEX, which CME Group bought in 2008, and rank with Brent as the world's two most-traded crude contracts. Brent trades mainly on rival ICE, though CME lists a Brent contract too. Producers, airlines and refiners hedge on these exchanges, and their prices settle physical oil deals.
When and why
New York's NYMEX launched crude futures in March 1983; CME Group acquired NYMEX in August 2008.
How we know
CME and ICE volume statistics, exchange contract specifications, and CFTC Commitments of Traders reports.
Debates and risks
Whether speculative trading, rather than physical supply and demand, sometimes drives oil prices too far is debated.
▸WTI and Brent: the oil price benchmarks on NYMEX and ICE are challenged in Asia by Shanghai INE yuan crude oil futures (2018)Fact, law or data
The connection
Brent and WTI are priced in dollars and trade mainly in the West. China, the largest crude importer, launched yuan-priced futures in Shanghai in 2018 so Asian oil could be priced, hedged and paid for in yuan, and to raise China's influence over oil pricing.
When and why
Shanghai International Energy Exchange, since March 26, 2018, priced on Middle Eastern medium sour crudes delivered to Chinese ports.
How we know
Trading volumes reported by the exchange and the Futures Industry Association; studies show Shanghai prices closely track Brent and Dubai.
Debates and risks
Whether the Shanghai contract can become a true global benchmark while China limits capital flows and the yuan is not freely convertible.
▸WTI and Brent: the oil price benchmarks on NYMEX and ICE saw WTI go below zero during COVID-19 crash and rescue (2020)Fact, law or data
The connection
Lockdowns cut oil demand by about a fifth within weeks. WTI futures require physical delivery at Cushing, Oklahoma, where storage was filling. Holders of the expiring May contract, including a Bank of China retail product, had nowhere to put oil and paid others to take it: on April 20, 2020, it settled at minus $37.63 a barrel.
When and why
NYMEX, April 20, 2020, one day before the May contract expired; Brent, which settles in cash, stayed positive.
How we know
NYMEX settlement records and the CFTC staff's November 2020 interim report on the negative price.
Debates and risks
How much the price was driven by storage limits versus a rush of selling near the close is still debated; lawsuits followed.