Master the Oil Market: What Is Brent Crude Oil?

Brent is an international benchmark for the Atlantic basin crude oil, and its contract prices trade on London's ICE Futures exchange. Brent is used as a light oil market for Africa, Europe, and the Middle East and generates most of its crude from about a dozen oil fields in the North Sea between Norway and the Shetland Islands.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, OPEC+, rely on Brent as their pricing benchmark.

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Why Invest in Brent Crude Oil

Brent is an interesting investment when trading in global energy markets, mainly because it is often considered a superior reflector of oil prices. This is because it used to price about two-thirds of the world's trade crude oil supplies. This explains why Brent is generally more expensive than some of its counterparts, including West Texas Intermediate (WTI).

In addition, Brent is naturally light and sweet, meaning that it is typically preferred in refining crude oil to produce diesel, gasoline, and a broad array of other petroleum products. This is especially true in the current international energy market.

Suffice to say, global Brent crude demand can often be more significant than many of its benchmark alternatives, like WTI and Dubai crude.

Final Thoughts

Crude oil remains one of the most heavily traded commodities in the global financial markets today. From WTI to Brent, oil prices are affected by various factors, be it geopolitical conditions or macroeconomic events.

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