Oil is the commodity that reaches everyone. Whether or not you have ever traded a barrel, its price is inside your fuel bill, your electricity tariff and the cost of everything that travels by truck. On our commodities tab you will see two oil prices, not one — and the difference between them is the right place to start.
WTI and Brent: why two prices
West Texas Intermediate (WTI) is the benchmark for oil produced in the United States, priced at a delivery hub in Oklahoma. Brent is the benchmark for oil from the North Sea and effectively for most oil shipped worldwide. Both are light, easily refined crudes, and their prices normally move together within a few dollars. Most countries that import oil — including most of Asia — pay prices linked to Brent, which is why Brent usually matters more for fuel costs outside America.
The supply side
A short list of producers controls a remarkable share of global supply. When OPEC and its allies agree to cut production, they are deliberately restricting supply to lift prices; when they raise output, prices tend to ease. Alongside official policy sits geography: wars, sanctions and attacks on shipping routes can remove real barrels from the market or simply make traders fear that they might, and fear alone moves the price. American shale producers act as a counterweight — when prices rise far enough, they drill more, adding supply that caps rallies.
The demand side
Oil demand is a proxy for global economic activity. Factories, airlines, shipping fleets and commuters all burn it, so strong growth lifts demand and recessions crush it. Demand also breathes with the seasons — summer driving, winter heating — and with longer trends like the slow spread of electric vehicles.
Inventories: the weekly scoreboard
Every week, official reports show how much oil is sitting in storage. Rising stockpiles suggest supply is outrunning demand and usually pressure prices; falling stockpiles suggest the opposite. Traders react to these reports within minutes, which explains many of the sudden mid-week jolts you will see on our oil charts.
From the barrel to your bill
When crude rises, petrol and diesel follow with a lag of days to weeks, and in countries that generate electricity from imported fuel, power costs eventually follow too. For import-dependent economies there is a second, harsher effect: oil is bought in dollars, so an expensive barrel drains foreign reserves and can weaken the local currency — which then makes the next barrel cost even more in local terms.
Watching it well
On our tracker, put three charts together: Brent, your local currency against the dollar, and the stock index of any oil-importing country you care about. When Brent climbs steeply, the other two rarely stay still for long.