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May 12, 2023 · The 40-Year Story of a Crude Oil Benchmark. At a Glance. Amid a volatile environment for crude oil in 1983, commodity traders in New York began trading what is now the global oil price benchmark. WTI Crude Oil futures have remained resilient in setting the price for oil through wars and economic downturns. Today, the price of oil is no mystery.
Apr 3, 2023 · The creation of the WTI Crude Oil futures contract 40 years ago was a leap of faith. Not everyone believed it would succeed, let alone become the key global benchmark that it is today.
- At A Glance
- "The World Needed It"
- Early Stress Tests
- Not Just About Trading Oil
Amid a volatile environment for crude oil in 1983, commodity traders in New York began trading what is now the global oil price benchmarkWTI Crude Oil futures have remained resilient in setting the price for oil through wars and economic downturnsThat year, the oil market was mostly in freefall, with Iraq and Iran at war and OPEC finding its footing. With this stormy backdrop, visionaries at NYMEX, now part of CME Group, wanted to establish a transparent market for crude oil where global market participants could come to manage the risk that defined the market. “Let’s face it: there were no...
3,000 contracts traded in the first month after the launch of WTI, and a year later, trading volume would top 100,000 contracts a month, according to CME Group data. As WTI proved its worth, volumes ramped up even more, topping two million contracts per month by the end of the 1980s. The crude futures contract was barely three years old when it fac...
For his part, McMahon is in awe of how the contract became enmeshed in the broader economy. “It's not just about trading oil. It has priced multiple industries.” Krus also became a believer because of the volumes the contract attracted. “There's three things that make a contract work, and it’s liquidity, liquidity and liquidity.” The WTI contract o...
Since launching 40 years ago, WTI crude oil futures have gone from a nascent contract to a reliable global price benchmark, setting the agenda for the entire commodity suite. In that time, U.S. exports have gone from virtually zero to a current rate of over 4 million barrels per day.
May 1, 2023 · Since launching 40 years ago, WTI crude oil futures have gone from a nascent contract to a reliable global price benchmark, setting the agenda for the entire commodity suite. In that time, U.S ...
- Owain Johnson
A benchmark crude or marker crude is a crude oil that serves as a reference price for buyers and sellers of crude oil. There are three primary benchmarks, West Texas Intermediate (WTI), Brent Blend, and Dubai Crude. Other well-known blends include the OPEC Reference Basket used by OPEC, Tapis Crude which is traded in Singapore, Western Canadian ...
People also ask
When did WTI become a benchmark?
Why was WTI ill suited to be a global benchmark?
Why is the price of WTI important?
What are Brent & WTI benchmarks?
Is WTI better than Brent?
What is WTI crude oil?
In 1983, US WTI became a benchmark after it was selected as the main reference grade for the new NYMEX crude oil futures contract and evolved as the global marker. Dubai and Oman developed as key price links for oil sales to Asia. The benchmark status of Brent and WTI was supported by their highly liquid electronic futures exchanges.
