Oil gained 2.5% on Friday, July 15 after a US official told Reuters that an immediate Saudi oil output boost was a no-go.
Meanwhile, investors have started bombarding questions on OPEC’s capabilities to significantly ramp up crude production.
“Part of the support is that everybody and their brother who digs down into the Saudi situation see that they don’t have a lot of capacity left,” said John Kilduff, partner at Again Capital LLC in New York.
Brent Crude futures popped up to USD101.16 a barrel, reflecting a USD2.06 rise which translates to a 2.1% bump while the West Texas Intermediate crude found resistance at USD97.59 per barrel gaining USD1.81 on the previous value, or a jump of 1.9%.
Meanwhile, Brent crude futures for September delivery rose USD2.06 and settled at USD101.16 a barrel, marking a 2.08% gain.
The world is experiencing a volatile period in global oil trade, and the talk of “oil prices” have become frequent. However, most are still attempting to understand the various categories into which the commodity falls. Here’s a breakdown;
- Brent: this originally referred to crude oil pumped out of a North Sea oilfield roughly 100 miles off the coast of Scotland. It has since been decommissioned, but the name became immortalized as a reference to the mix of oil from several different North Sea deposits. The sulfur content of Brent is around 0.37% making it “sweet” in global oil jargon. Brent crude index is also heavily used in the Europe and OPEC, a cartel of countries that produce approximately 40% of the world’s oil and 60% of the world oil exports.
- Dubai: this is the benchmark for oil prices in Asia, Dubai crude is considered “sour” meaning it has high concentration of sulfur with medium viscosity.
- West Texas Intermediate: the American Index. This refers to crude that is “ever sweeter” than the Brent. The oil originates from Texas but also from other US oilfields, and is refined in the Midwest.