The price of WTI crude oil at $77.54 per barrel

Not only that: May Brent contract lost 36 cents

by Lorenzo Ciotti
The price of WTI crude oil at $77.54 per barrel
© David McNew / Staff Getty Images

The price of WTI crude oil is at $77.54 per barrel.

In the meantime though, Crude Oil futures fell today. The May Brent contract lost 36 cents, or 0.39%, to settle at $81.89 a barrel.

The West Texas Intermediate contract for April lost 38 cents, or 0.49%, to settle at $77.55 a barrel.

Traders weigh the latest U.S. inflation data and what it means for the Federal Reserve's interest rate decisions this year.

Crude oil
Crude oil© David McNew / Staff Getty Images

The strategic importance of crude oil in the world economy

The two main exchanges for trading oil are the NYMEX in New York and the IntercontinentalExchange in Atlanta, both of which are US-owned. Brent was previously listed on the International Petroleum Exchange in London.

On these two markets, WTI and Brent Blend quality oil contracts are listed for spot or futures at Cushing and Sullom Voe respectively. In both, the price of oil and the quotation take place in dollars.

The exchange contracts for these two oils actually only act as oil markers for all other transactions.

Brent Blend is made up of a basket of 15 oils extracted from the North Sea. In the past, oil extracted from a single oil field was used. Towards the end of the 1990s, the number of transactions involving this oil had become insufficient to guarantee that Brent oil trades were representative of the trading price and therefore it was decided to use a larger number of transactions and therefore to include trades concerning other petroleum crudes.

WTI is mainly used to price oils produced in North and South America. Brent Blend is used for those produced in Europe, Africa and the Middle East. More than 60% of transactions are made using the Brent Blend as a reference.

Oils that are lighter or have a lower sulfur content than their reference oil will trade at a positive premium; the opposite if they are heavier or have a higher sulfur content.

Brent reached its historic low on December 10, 1998 when it was quoted at $9.55 per barrel. The all-time high was on 11 July 2008 when prices recorded $147.25 per barrel.