Brent oil - high quality

Almost all countries that are engaged in oil production, on the world market, supply one or several of its varieties. They differ in chemical composition, and in order to order their taxonomy, as well as to simplify the export of "black gold", special standards for grades of crude oil were created. For Russia, Urals and Siberian Light are typical, for England - Brent oil, for the USA - Light Sweet.

Sometimes it happens that two varieties are produced in the country, for example, in Russia it is heavy Urals and light Siberian Light.

The name of low-sulfur oil Brent is composed of the first letters of the words denoting the horizons: Broom, Rannoch, Etieve, Ness and Tarbat. It has a density of 38 ° API - this is the standard defined by the American Petroleum Institute. The sulfur content in it is 0.2-1%.

Brent oil, as a reference mark, is extracted between the coasts of England and the European countries of Norway and Denmark in the North Sea. Here, on the outskirts of the graben Viking, is located the same-named deposit discovered in the year one thousand nine hundred and seventy.

In terms of its composition, properties and quality , Brent crude oil refers to real standards, because its components are considered to be the most optimal for producing petroleum products, including gasoline and medium distillers. In the oil fields of Saudi Arabia, the United States and South-East Asia, a product is produced that corresponds to the Brent benchmark in question.

And there are more than 10 brands of oil. Of these, Brent and WTI (West Texas Middle) are the most popular on the world market . Brent Oil is listed on the London Stock Exchange IPE. On the New York Stock Exchange NYMEX, the West Texas mark is more valued.

What determines the value of the product

Brent oil produced in different fields, of course, will have some differences from the reference mark. And it is from these differences, from how much they are significant, and its value depends. And the more raw materials extracted differ from the standard, the worse it is, the lower its price.

The main processing of this sort of raw material is carried out in the north-west of Europe. If the price conjuncture favors, it can be transported to the Mediterranean countries or the United States of America for processing.

The price of Brent oil is set in the process of exchange trades at current (spot) prices and contracts focused on future deliveries (futures). The bulk of transactions for this class is made on futures quotes.

It should be noted that futures contracts are beneficial to both the seller and the buyer. In this case, each of them insures themselves against a possible change in the price of raw materials. In the oil industry, at first, when futures contracts were only introduced into practice, they were treated skeptically, and sometimes even hostile. But gradually this practice began to be widely used, and to date almost all oil companies and countries involved in oil export have joined this process.

And in general, many factors influence the formation of prices on the world market. Of course, the main is the ratio of supply and demand. Also, a significant role is played by the state of the world economy, various risks, including geopolitical ones.