Benchmark Crude Oils
What makes a benchmark crude oil? Why is it that the market turns to WTI and Brent crude as the benchmark crudes in the industry? In general, benchmark crudes should be highly liquid with market prices available 24/7. Crudes that do not trade daily are priced off of one of the benchmark crudes such as Brent, Dubai, WTI, Tapis, or Omani crudes.
In addition, benchmark crudes have ample production without concern of maturing basins. In recent years, crude oil production in the North Sea has been declining as it is a fairly mature basin. Over the years, the market has adapted by adopting other crudes with very similar characteristics in nearby basins such as Ekofisk, Forties, and Oseberg crudes as substitutes for Brent. Hence, ...
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