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Is WTI a good oil?
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Where does WTI come from?
What is West Texas Intermediate (WTI)?
Apr 19, 2024 · Schlumberger has a 47.9% correlation to WTI crude oil prices. Bank of America has a "buy" rating and $62 price target for SLB stock, which closed at $50.94 on April 18.
Aug 8, 2024 · Some of the biggest companies in the world are oil and gas producers, including ExxonMobil (XOM 0.38%) and Shell (SHEL -0.51%). But just because you've heard of a stock or a company doesn't...
- Scott Levine
- The Differences in Crude Oil
- The Main Benchmarks
- Importance of The Derivatives Market
- The Bottom Line
There are different types of crude oil—the thick, unprocessed liquid that drillers extract below the earth—and some are more desirable than others. For instance, it’s easier for refiners to make gasoline and diesel fuel out of low-sulfur or “sweet” crudethan oil with high-sulfur concentrations. Low-density, or “light” crude is generally favorable t...
There are dozens of different oil benchmarks, with each one representing crude oil from a particular part of the globe. However, the price of most of them are pegged to one of the following three primary benchmarks:
Crude Futures
There was once a time when buyers would primarily purchase crude oil on the spot market—that is, they’d pay the current price and accept delivery within a few weeks. However, after the oil crisis of the late 1970s, refiners and government buyers began looking for a way to minimize the risk of sudden price increases. The solution came in the form of crude oil futures, which are tied to a specific benchmark crude. With futures, buyers can lock in the price of a commodity several months, or even...
Crude Options
In addition to futures, market participants can also invest in options that are linked to a particular crude benchmark. These derivatives are another important way to help mitigate price risk. Should the value of a certain crude marker skyrocket, the owner of a call optionwould have the right— though not the obligation—to buy a specific number of barrels at a pre-determined price.
Speculative Trading
However, not all futures or options tied to a crude benchmark are used for hedging purposes. Speculators are also major players in the market, betting that changes to supply or demand will drive the price of certain crude products higher or lower. Investors can also gamble on what will happen to the difference, or spread, between two benchmarks. Participants typically analyze the fundamentals of a specific oil source and guess whether the gap between two markers will widen or close. Like trad...
The market for crude is incredibly diverse, with the quality and original location of the oil making a major impact on price. Because they’re relatively stable, most crude oil prices worldwide are pegged to the Brent, WTI, or Dubai benchmarks.
- Pioneer Natural Resources Company (NYSE:PXD) Number of Hedge Fund Holders: 54. Pioneer Natural Resources Company (NYSE:PXD), based in Irving, Texas, specializes in hydrocarbon exploration.
- Devon Energy Corporation (NYSE:DVN) Number of Hedge Fund Holders: 45. Devon Energy Corporation (NYSE:DVN) is an energy company focused on hydrocarbon exploration in the United States.
- Chesapeake Energy Corporation (NASDAQ:CHK) Number of Hedge Fund Holders: 44. Founded in 1989, Chesapeake Energy Corporation (NASDAQ:CHK) specializes in exploring and responsibly developing key assets within three prominent U.S. oil and gas regions: the Eagle Ford, Haynesville, and Marcellus Shales.
- Diamondback Energy, Inc. (NASDAQ:FANG) Number of Hedge Fund Holders: 44. (NASDAQ:FANG) is a U.S.- based energy company exclusively operating within the Permian Basin.
May 4, 2024 · West Texas Intermediate is a high-quality crude oil sourced in West Texas. As one of the world's foremost sources of crude oil, WTI is a benchmark for the U.S. oil industry and...
Jul 1, 2024 · To help you identify the best oil stocks for your portfolio, Forbes Advisor has developed this list of steady performers that boast favorable performance metrics and strong balance sheets.
Aug 30, 2021 · West Texas Intermediate is the benchmark for the U.S. light oil market and is sourced from U.S. oil fields. Both Brent Crude and WTI are light and sweet, making them ideal for refining into...
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